With the construction of private office buildings and their subsequent operations, activity within the office sector makes a substantial impact on Canada’s economy and standard of living.
In fact, such a contribution is estimated to be $20.8 billion during 2013, according to the Real Property Association of Canada’s (REALpac) recently released landmark study, “The Contribution of the Office Real Estate Sector to the Canadian Economy.”
One area reaping these profits is employment. Commercial real estate offers workspace for millions of Canadians, with employees averaging $62,000 in income each year.
From development and investments to building operations, overall, the office sector accounted for 111,600 full-time jobs and generated $6.9 billion in personal income.
From this, new construction generates the bulk of these positions at 45,900 jobs, while also producing the majority of personal income at $3.1 billion, followed by renovations and improvements.
Those directly supported include project development managers, building managers and skilled trade workers, while other high-paying jobs, such as architects, engineers and legal professionals are indirectly compensated.
Ontario records the highest number of jobs in the office sector at 51,700, followed by Quebec. Although Alberta falls behind at 19,200 jobs, the average wage in the province is the highest at more than $73,000.
For added perspective, REALpac’s report states the number of jobs in Alberta’s office sector is close to the total employment of the province’s utility sector.
On the other side of the country, Atlantic Canada recorded the lowest income, the lowest number of jobs and, subsequently, the lowest corporate profit at $0.13 billion.
Still, companies across the country, ranging from large to small corporations, earned $4.4 billion in corporate profits, with new construction being a significant part of this profit.
On the investment front, $7.7 billion was spent altogether, with about $4.5 billion on new buildings and the remaining $3.2 billion going toward improvements and upgrading of existing buildings.
Ongoing operations, an integral part to a building’s everyday life, produced roughly $2.5 billion in both building management fees and brokerage fees from sales and leasing.
The office real estate sector also generates millions of dollars in revenues for governments. Altogether, federal and provincial governments took in a total of $1.7 billion in personal taxes and $800 billion in corporate taxes from the office sector.
In addition, many building owners provide high revenue to municipalities and school boards across the country through realty taxes.
According to the report, the commercial office sector also plays a significant role in regional economies and adds value to Canada’s gross domestic product (GDP).
Ontario generated the largest share of economic activity, with construction spending on new buildings and operations adding $4.8 billion to the province’s and Canada’s GDP.
Following Ontario was Alberta and Quebec, adding $2.3 and $1.9 billion respectively.
