The Department of National Defence (DND) has purchased two Ottawa properties, including an office building and an industrial facility, for $59 million, moving from leasing to ownership amid a broader spending push and real estate constraints.
Purchase details and rationale
DND previously leased the facilities at 1600 and 1630 Star Top Rd. in Ottawa’s east-end industrial park. The department decided its “needs would be best served through direct ownership of the properties,” according to spokesperson Andrée-Anne Poulin. The purchase closed on April 1 and was first reported by the Ottawa Business Journal.
“The facilities will continue to support longer term DND and Canadian Armed Forces operational requirements in the National Capital Region,” Poulin said in an email, adding the move responds to “evolving long-term requirements.” The former owner, Ottawa property management company Arnon Corp., did not immediately respond to a request for comment.
Growth and space pressures
The shift from leasing to owning comes as DND’s headcount grew by nearly 3,000 employees over the last fiscal year, partly due to the Canadian Coast Guard moving under the department’s purview. While much of the federal public service is shrinking, DND is one of the few areas experiencing growth as Canada strives to meet a NATO pledge to spend five per cent of annual GDP on defence by 2035.
DND was among several large federal departments unable to fully meet Treasury Board’s four-day return-to-office directive by the July 6 deadline. In a May 22 memo, the department’s top civilian official, Christiane Fox, cited “space constraints” and anticipated growth as reasons to “stagger” the return-to-office plans.
Parking and portfolio challenges
A long-standing parking shortage at DND’s Carling Campus escalated this spring after military police towed 13 cars belonging to government workers. DND has since examined whether to turn nearby sports fields into parking lots as a temporary solution.
Elsewhere in the public service, the return-to-office push has forced Public Services and Procurement Canada (PSPC) to adjust its earlier effort to cut the federal office portfolio by half over a decade. PSPC has entered into 16 leases in Ottawa-Gatineau since Treasury Board announced updated hybrid work rules in February. Spokesperson Michèle LaRose said those leases can mean a “renewal, relocation or optimization” of the real estate portfolio and do not “necessarily mean a net increase in occupied space.” However, the department refused to answer questions about the nature of the leases or the net change in PSPC’s office portfolio since February.
