As public health restrictions linger, more companies realize they don’t need office space. Statistics Canada (Stat Can) data shows new public health restrictions had more people work from home in January. Nearly a quarter of labor now permanently works from home, with that share rising sharply in big cities. The shift can change cities from places for work, to places that compete for quality of life.
Canadian Public Health Measures Have 4 in 10 Working From Home
More Canadians are working from home due to renewed public health restrictions. The latest Labour Force Survey (LFS) shows that 4 in 10 (43.0%) of workers are working from home. Another 30.3% of people who don’t typically work at home, now do so at least part of the week.
Nearly A Quarter of Canadians Now Permanently Work From Home
More workplaces realize they don’t need an office as they’re forced to work remotely longer. Almost a quarter (24.3%) of working-aged Canadians now work from home exclusively. Stat Can notes the 2016 Census revealed only 7.5% of workers did so at the time. The pandemic has accelerated this trend by years. In just 5 years, the share of the population working from home is over 300% higher.
Canadian Cities Are Adopting Work From Home Much Faster
Canada’s national statistics agency has found cities adopting the trend much faster. Urban areas have seen 25.6% of the labor force adopt a permanent work from home arrangement in January. In rural regions, the share working from home is 17.2%, much lower than in the cities. Still, this is multiples of the national average just a half decade ago. A higher trend in the city is most likely due to the type of work, and the ability to work from home.
Over A Third of Ottawa and Toronto Permanently Work From Home
Two very expensive housing markets now lead for those who permanently work from home. The share of labor working from home is highest in Ottawa (40%), with Toronto (34.7%) not far behind. Both cities have seen housing soar in price, partially due to the proximity to work. Having such a large share of highly mobile labor should be a concern for policymakers. They’re now located in the city for quality of life, not because they have to be.
Testing the waters? A significant share of workplaces has now adopted “hybrid” arrangements. Another 1 in 20 workers in the LFS said they go into work some days and work from home the remainder. Some of the world’s largest companies have been using this to test the waters for a more decentralized office. This allows them to tap a much larger talent pool while testing if the situation is still manageable.
There are two obvious takeaways from the data — non-residential investment and deflationary pressure. Non-residential building activity hasn’t seen the same boost as housing. These real estate investors also have access to cheap capital, so it’s not an issue of money. More likely they’re waiting to see what needs materialize and where that demand pops up. That won’t be clear until public health measures are lifted, and we find out how much is temporary.
A highly mobile workforce can also lead to deflationary pressures in expensive markets. Top talent from all over the country is now competing, much of it in more affordable regions. This can eliminate the pressure of housing on higher wages for expensive regions. At the same time, it can be a boost for wages in more affordable regions that have less competition. One again, this won’t be clear until the new “normal” is revealed.