Exploring Savings in Real Estate
The Way Forward is a wide-ranging strategy led by Public Works and Government Services Canada (PWGSC) to find innovative ways to deliver services smarter, faster and at a reduced cost, and to improve how the Government of Canada does business.
EXPLORING SAVINGS IN REAL ESTATE
PWGSC delivers approximately $3 billion a year in real property activities
and services such as office accommodation, property management, and architecture
and engineering services. Our goal is to reduce that amount by $925 million
over five years by, among other things, improving how we manage our real estate
and reducing the amount of office space per employee in line with private sector
practices. We are committed to doing this without reducing the visibility of
the Government of Canada in regions and communities, and in keeping with our
commitment to environmental excellence.
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Key Facts – Real Property
- The Government of Canada accommodates over 210,000 public servants in 1,840 locations across the country.
- PWGSC is the largest administrator of office space in the country, with 5.7 million square metres of office space in its portfolio, 60% of which is owned and 40% leased.
- On average, the buildings owned by PWGSC are 43 years old, which means that some buildings will require major rehabilitation in the near future.
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Real Estate Management
The Government of Canada owns and leases a portfolio of 5.7 million square metres of office space. If the government retains ownership of its current real estate portfolio, it will need to invest $2 billion over the next five years to address rust-out issues. The government also tends to own a higher proportion of buildings than many leading corporations. PWGSC will seek advice and recommendations on how to best manage our real estate portfolio. Our objective is to look at the economics of owning and leasing property. This could lead to changes in how we manage the portfolio, as well as changes in our own/lease ratio.
Planning and Management
Over the next five years, we will find savings through better planning and
management. This includes, for instance, pursuing a more aggressive leasing
policy by examining all suitable options to lower costs when leases are up for
renewal. It also includes such initiatives as cost sharing by co-locating with
provincial and municipal governments across Canada, reducing total office space,
contracting out property maintenance services, and exploring, where appropriate,
the use of multi-purpose (residential, retail and office) complexes.
We are making progress on many fronts. In November 2004, SNC-Lavalin Profac won the new contracts for property management and project delivery services – contracts that will save Canadians up to $50 million per year over our estimated budget.
The department is also making more efficient use of office space. Analysis shows that the federal government is using more space per employee than it needs to. We are generating substantial savings by reducing the amount of total average space per employee (in line with private sector practices), and by rigorously applying accommodation standards.
Increased efficiency in our own overhead and system costs is also part of our strategy and we are committed to better performance in this area through, for instance, increased reliance on the private sector.
Savings over Five Years
The following table indicates the planned savings in Real Property over the next five years.
Savings ($ Millions)
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2005-06
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2006-07
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2007-08
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2008-09
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2009-10
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5-Year total
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130
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130
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150
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235
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280
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925
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