The Evolving Canadian Office Landscape: What Landlords and Tenants Need to Know

Toronto's downtown business district

The return to the office has looked different across the globe, and recent data reveals a unique story developing in Canada. While office markets in the United States and the United Kingdom are on one path to recovery, Canada is carving out a distinct, more gradual trajectory. For commercial property owners and tenants in Hamilton and across the country, understanding this trend is key to making informed real estate decisions.

Canada's Office Availability on the Rise

Since 2021, major business districts in Canada have seen office availability increase more significantly than their counterparts in the U.S. and the U.K. Between 2021 and the second quarter of 2025, Canadian office availability in downtown cores climbed by 4.8 percentage points. In contrast, the U.S. saw a more moderate rise of 3.2 points, while the U.K. actually experienced a 1% decrease in the same period.

This translates to a substantial 36% increase in the rate of available office space in Canada over the past four years, a figure that stands out when compared to the 16% increase in the United States.

The Driving Force: A Lasting Embrace of Hybrid Work

The primary factor behind this trend appears to be Canada's sustained adoption of hybrid and remote work models. Many Canadian companies continue to offer flexible work arrangements to attract and retain talent.

Data from job posting sites shows that as of the second quarter of 2025, about 14% of Canadian job listings mention remote or hybrid options, a figure that has held steady for several years. This is notably higher than in the U.S., where such postings peaked around 10% in early 2023 and have since fallen to approximately 7%. The U.K. shows even less emphasis on remote work, with these terms appearing in 3% or fewer of job postings.

Further analysis of new job creation in Canada highlights this shift. In the third quarter of 2023, 69% of new jobs were fully in-office. By the first quarter of 2025, that number had dropped to 59%. During that time, the share of hybrid jobs rose to 29%, and fully remote positions increased to 12%.

Surveys support this data, with one study indicating that Canadian employees work an average of 1.9 days per week outside the office, a higher number than in many other nations. Factors like challenging weather conditions and long commutes may contribute to this preference.

What This Means for You

This sustained trend toward flexible work has direct implications for commercial real estate:

• For Landlords: With higher availability, competition to attract and retain tenants is more intense. Landlords may need to consider offering greater flexibility in lease terms and investing in building amenities that make the office an attractive destination for employees. Highlighting features that support a hybrid workforce can be a significant advantage.

• For Tenants: The current market may present opportunities to negotiate more favourable lease terms. Businesses are also rethinking their space needs, prioritizing flexible layouts that can accommodate a rotating cast of in-office and remote employees. The right space is crucial for fostering collaboration and maintaining company culture in a hybrid environment.

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The Takeaway

The Canadian office market is not in decline, but it is clearly evolving. The recovery is expected to be a marathon, not a sprint, as businesses and employees settle into new work routines.

Navigating this changing landscape requires a strategic approach. Whether you are a building owner adapting to new tenant demands or a business seeking the right space to support your team, understanding these market dynamics is the first step toward success.