CAPE lays out the evidence and calls on Carney to explain whether concerns about roughly $10 billion in bank exposure to commercial office real estate influenced the government’s return-to-office policy.
OTTAWA — A federal government source has told the Canadian Association of Professional Employees (CAPE) that officials were “very worried” two years ago about the financial-sector risks posed by empty office buildings after years of speaking positively tele- and hybrid week. According to the source, those concerns later appeared to “evaporate” as governments and major employers began pushing workers back into downtown offices.
“RTO has never been about productivity, efficiency or philosophical choices. The most obvious explanation is that it’s a $10 billion handout to the Big Banks that made poor investments,” said CAPE President Nathan Prier. “They failed to adapt when ways of work moved beyond the old 9-5 model, and we believe Carney and the government have stepped in to save them, at the expense of up to $40 billion in savings for Canadians. Carney talks all day about ‘elbows up’, but his elbows seem to be up for workers and down for corporate Canada.”
According to the source and non-public federal risk material reviewed by CAPE, officials in the federal finance portfolio were actively tracking office vacancy, reduced office demand, declining values, and the exposure of major financial institutions. The material identifies approximately $10 billion in office-related exposure across four banks: CIBC at about $6.1 billion, National Bank at about $2.6 billion, BMO at about $1.5 billion in potentially affected assets, and RBC at about $550 million.
These concerns were not confined to non-public government material: federal financial institutions and regulators were also publicly warning about the same risks. The Bank of Canada reported in 2024 that commercial real estate valuations remained under pressure, particularly in the office subsector, where vacancies were high. OSFI’s 2025–26 risk outlook said high vacancy rates were driving declines in office property values and noted that companies maintaining work-from-home arrangements could downsize when their leases came up for renewal.
The source’s account and material also sit alongside other points on CAPE's evidence trail, including the fact that RTO4 was announced shortly after banks and commercial real estate interests lobbied federal regulators and policymakers. [SEE BACKGROUNDER]
The timeline and the government’s silence on commercial real estate risk that it was actively monitoring are increasingly difficult to ignore. CAPE believes workers and taxpayers are now being asked to give up the productivity gains associated with telework, while Canadians are being asked to give up nearly $40 billion over ten years in potential office savings for a policy that may help protect roughly $10 billion in bank exposure to commercial office real estate.
“At the same time that the government is cutting the programs and services Canadians rely on, public servants are being forced back into expensive office buildings and sacrifice real productivity gains,” said Rebecca Clark, a CAPE member. “RTO is not a good economic policy – unless you’re one of the Big Banks. The prime minister should be making life more affordable for everyday people in this country. Not just for the richest and most well-connected.”
Members of Carney’s own caucus have also challenged the one-size-fits-all approach. Liberal MP Bruce Fanjoy said there was “little to no evidence that a one-size-fits-all RTO policy will improve productivity or service to Canadians.” Liberal MP Jenna Sudds, a former public servant, said she would continue pressing the government and National Capital Region colleagues for meaningful flexibility as the policy is implemented.
CAPE is calling on the Carney government to:
- Publish the evidence and business case used to justify mandatory in-office presence for federal public servants.
- Release records showing whether commercial real estate, office demand, financial stability or bank exposure influenced the decision, including relevant communications with banks, Brookfield and commercial real estate interests.
- Explain why it abandoned its earlier findings on telework’s productivity, cost-savings opportunities, work-life balance and environmental benefits.
“Workers are not infrastructure for bad office bets,” said Prier. “If bank and commercial real estate risk had nothing to do with this policy, the government can demonstrate that by releasing the records. Public servants and all Canadians deserve an evidence-based explanation for where their money is going and who really benefits.”
