The shift to remote and hybrid working arrangements has significantly impacted businesses in downtown Ottawa, particularly those reliant on the patronage of federal public servants. With many employees now only returning to the office for a few days each week, local shops and restaurants are grappling with a sharp decline in lunchtime and after-work customers.
A Changing Landscape for Local Businesses
Pat Nicastro, owner of La Bottega, a fine-food shop located in Ottawa’s Byward Market, reflects on the changes that have unfolded since the onset of the pandemic. Previously, the lunchtime rush from nearby federal offices provided a steady stream of customers. “Before, you had the benefit of thousands of workers working in the area every day,” Nicastro remarked. Now, with many public servants working from home or adopting hybrid schedules, his business has felt the strain.
This transition has not only altered customer traffic patterns but has also coincided with government cuts that have reduced the overall number of federal employees, further exacerbating the situation for local businesses that depend on their patronage.
Government Engagement on Hybrid Work Policies
At a recent forum attended by around 1,100 business leaders, Prime Minister Mark Carney acknowledged the concerns surrounding hybrid working arrangements for public servants. He indicated that his government plans to engage with public-sector unions to explore the possibility of increasing office attendance, depending on factors such as seniority and role responsibilities. “We will come to a sharper view on it over the course of the next several weeks,” he stated.
However, this proposal has not been met without criticism. Sharon DeSousa, national president of the Public Service Alliance of Canada, expressed her dismay, asserting that Carney’s commitment for more in-office work is disconnected from the needs of both employees and taxpayers.
The Economic Impact of Reliance on Federal Workers
Statistics Canada reports that the National Capital Region, encompassing Ottawa and Gatineau, boasted 153,979 federal public servants in 2025. In contrast, the numbers for other provinces are markedly lower, with Ontario outside the NCR recording only 48,886 federal employees. This heavy reliance on civil servants for economic stability poses challenges, particularly as businesses struggle to adapt to a reduced customer base.
Anish Mehra, owner of Ottawa’s East India Restaurant, highlighted the significant drop in federal patronage, noting that federal workers used to account for 50 to 60 per cent of his lunchtime customers. That figure has dwindled to a mere 20 to 30 per cent. While he empathises with the workers’ desire for remote arrangements, he believes a return to the office would be beneficial for the local economy.
The Call for Economic Diversification
Sueling Ching, president and CEO of the Ottawa Board of Trade, emphasised the importance of the downtown core to the overall economic health of the city. Representing approximately 20 per cent of the city’s tax base, the vitality of this area is crucial for Ottawa’s financial wellbeing. She acknowledged the need for a strategic approach to bolster the downtown economy, which has been overly reliant on the federal workforce.
A recent report from the Board of Trade argued for a transformation of the city centre, advocating for diversification away from dependence on federal employment. It pointed out that while the presence of federal buildings was once an asset, it has now become a liability, as the pandemic accelerated the need for a more varied economic landscape.
Ching asserts that clarity from the federal government regarding remote work policies could stimulate the private sector to hire and expand, ultimately aiding in the recovery of the downtown area.
Why it Matters
The ongoing shift towards hybrid work represents a critical juncture for Ottawa’s economy. As businesses adapt to fewer customers, the potential for long-term economic ramifications grows. The need for diversification and a robust recovery strategy is paramount for the future of the downtown core. With federal policies directly influencing local commerce, the decisions made in the coming weeks could shape the landscape of Ottawa’s retail and service sectors for years to come.
