Did your last walk through downtown Toronto feel quieter than usual? It’s not just your perception; fewer people are commuting to work in Toronto’s downtown offices. Strategic Regional Research Alliance (SRRA), a think-tank focused on Greater Toronto regional growth, recently released its July Occupancy Index. This Index, which tracks office occupancy relative to pre-2020 levels, revealed a minor setback but an overall trend towards recovering occupancy rates. However, despite nearly doubling over the past year, the rate remains at half the usual level.
Toronto Offices Are Seeing Half The Occupancy Rate Seen Pre-2020
Toronto office occupancy suffered a minor setback, but things are generally improving. Compared to pre-2020 occupancy levels, the occupancy rate fell 1 point to 51% in mid-July. This marks a significant improvement, at nearly double the rate seen at the same time last year (27%). A period-to-period decline may not sound great, but it is more likely attributed to a seasonal trend. August is a big month for vacation time, especially in finance.
Hybrid Work Means Occupancy Falls to Just 27% On Mondays
As more companies adopt hybrid work policies, the day of the week has become a significant factor. SRRA research reveals that Wednesday saw occupancy hit an average of 68% in the latest data. On the flip side, occupancy falls to just 27% of pre-2020 levels on Mondays. Which makes sense because everyone hates Mondays, right?
Canadians Embrace Work-From-Home More Than Most Countries
While the work-from-home arrangement is viewed by many as temporary, the sentiment in Canada is very different. A study from IFO, a German think-tank, looked at how work-from-home trends have stabilized post-pandemic. Their data revealed Canadians are working from home an average of 1.7 days per week. That ranks higher than any other country, and 21% higher than our neighbours to the South. Sure, Americans have guns, but Canadians have work-from-home—from our cold dead hands.
The study doesn’t dive into the reasons, but Canada only has a few well developed downtown office regions. They also happen to be located in the center of cities where the cost of living has spiraled out of reach for most local office employees. Combined with rapid population growth in the exurbs (distant suburbs), it’s fair to assume workers moved to places their budget could stretch further. Now they might be just outside of the range of a normal commute, if within commuting distance at all.
A tight labor market likely means workers have the final call. When it comes to remote workers, employers aren’t just competing with local employers. They’re now competing with any and every company that’s embraced remote work.