Murray Wood: Of Easter bunny bells and Juicy Fruit gum
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TORONTO — The Canadian office vacancy rate dipped last year for the first time since the pandemic as the return-to-office trend accelerated, said a report out Wednesday from CBRE Ltd.
The national office vacancy rate stood at 18 per cent at the end of 2025, down from 18.7 per cent a year earlier, though still much higher than the 10.9 per cent rate at the end of 2019.
The downward trend comes as employers are increasingly mandating that workers head back to the office. Several of Canada’s big banks pushed to have staff in office more starting last fall, while the Ontario government has told employees to return to the office five days a week as of Monday.
Vacancies are trending down not only from rising demand from the trend, but also from very little new supply coming on the market and the conversion of some existing office buildings to other uses.
New building starts, and completions of buildings, hit a record low last year, said CBRE, while active construction levels for new buildings stood at the lowest in 20 years.
The only significant building under construction is the second phase of CIBC Square in Toronto, slated for completion this year. CBRE said no other Canadian cities have any meaningful downtown office construction underway, while suburban construction is limited and conservative.
While the CIBC building is fully leased, CBRE said that much of the limited new supply that has come to market elsewhere remains vacant.
The plunge in new supply did however help lead to 2.2 million square feet of positive net absorption last year, for a second year of gains.
“It is encouraging to see a second year of strong office leasing activity, even though the office market recovery remains somewhat uneven,” said CBRE Canada research managing director Marc Meehan in a news release.
Toronto accounted for the vast majority of net absorption, helping offset negative net absorption in markets like Ottawa and Calgary.
Calgary still saw its vacancy rate fall though, as landlords took supply off the market through conversions largely to residential use. The city has seen most of the office conversion projects in the country, a trend that has also seen buildings converted for use in the hotel, life sciences and education sectors.
Since 2021, Canada has seen about 7.8 million square feet in office space converted, as well as 2.6 million square feet demolished, leading to about a 2.2 per cent reduction in inventory.
At the end of 2025, Calgary’s vacancy rate of 25.9 per cent was among the highest in the country, while London, Ont., stood at 26.2 per cent. Vancouver and Halifax had among the lowest vacancy rates at 11.6 and 10.7 per cent respectively, while Toronto’s rate matched the national average of 18 per cent and Montreal stood at 18.3 per cent.
This report by The Canadian Press was first published Jan. 7, 2026.
Ian Bickis, The Canadian Press
