Mayor concerned about downtown economy with federal job cuts, U.S. tariffs

Ottawa Mayor Mark Sutcliffe addresses the Ottawa Board of Trade. Jan. 21, 2025. (CTV News Ottawa)

Ottawa Mayor Mark Sutcliffe says he is concerned about the downtown economy with news of federal job cuts and wants to see more people living and working in the heart of the city.

Sutcliffe delivered a state of the city address to the Ottawa Board of Trade Tuesday, touching on several economic subjects, including the risk of U.S. tariffs on Canadian goods and the future of the capital’s downtown core.

Speaking about Immigration, Refugees and Citizenship Canada’s (IRCC) plan to eliminate 3,300 positions nationwide over the next three years, Sutcliffe said any reduction of the federal workforce in the city will affect the economy.

“We are already starting to hear talk of job cuts in the federal public service. There was news about that yesterday. That’s a huge threat to our local economy, and we need to be ready for it,” he said.

“Even though there are more people downtown now, since the return-to-office moves by the federal government in September, we’re still not back to pre-pandemic levels. It’s going to take years for a full recovery to happen, and we can no longer count on federal government employees to fill that gap. We need to make sure that there are more people living downtown, and more attractions to bring people downtown.”

Sutcliffe said there needs to be more collaboration between the federal and municipal governments about using surplus federal buildings to their full potential. The federal government has already directed Public Services and Procurement Canada (PSPC) to reduce its office portfolio by 50 per cent, “something that’s never happened before in our city,” said Sutcliffe. The 2024 federal budget included $1.1 billion over 10 years, starting in 2024-25, for PSPC to convert underused federal offices into homes, with a focus on student and non-market housing.

The mayor said these buildings should not remain empty.

“I think the federal government has a responsibility as the number one employer and the number one property owner in the city to work with us on a plan.”

He also called for more private sector investment in downtown Ottawa to spur economic growth.

“We’re going to need to see growth in the private sector to offset future setbacks in the public sector. We’re must continue to diversify our economy, to support entrepreneurship, to grow more companies, to create more jobs,” he said. “Economic growth is vitally, vitally important for our future because economic growth is what drives progress for all our residents and it’s what generates the resources we need to face all of our challenges, including and especially supporting the most vulnerable.”

Sueling Ching, president & CEO of the Ottawa Board of Trade, echoed Sutcliffe’s comments Tuesday.

“We need to transform, to be more diverse for our future,” said Ching.

“Since the pandemic and post-pandemic, we have to become more diverse and resilient. That means looking at opportunities to grow the private sector, to leverage the continued benefits of having the public sector here but understanding that it is changing.”

Ching also highlighted the Ottawa Board of Trade’s recent ‘Downtown Ottawa Action Agenda’, released this past spring, as part of the city’s effort to reduce its reliance on the public sector.

It’s a plan that calls for a $500 million investment from all levels of government and the private sector, to fund several initiatives.

That includes efforts to improve the experience in the downtown core, by focusing on new public spaces on Sparks Street and in the ByWard Market, new housing development, improving transit options and boosting marketing efforts “nationally and internationally” to boost economic activity and improve the perception of the downtown core.

Trump’s reelection poses risks to Ottawa, mayor warns

Sutcliffe warned of both economic and social uncertainty with Donald Trump back in the White House.

The U.S. President was sworn in Monday and while he did not follow through on a promise to impose tariffs on all Canadian goods entering the United States on his first day in office, he suggested those tariffs could still be imposed as early as Feb. 1.

“There is a significant risk of a trade war between our two countries, something that was almost unimaginable a few years ago,” Sutcliffe said. “That trade war could create significant uncertainty and even economic damage throughout Canada, including here in Ottawa.”

He added that the last Trump administration led to an influx of asylum seekers in Canada and warned it could happen again while the city is already dealing with an increasing number of migrants.

“The last time Donald Trump was elected president, there was a spike in refugee claimants in Ottawa. We may see that again this year,” he said.

“Immigration is a challenging file, and we’ve had to make some very tough decisions as a city. Over the past few years, we’ve had to close down community centres and recreation facilities to house new arrivals.”

The rise of asylum seekers has been putting pressure on local shelters, with operators like the Ottawa Mission saying people are arriving in Ottawa with no apparent government support. Sutcliffe said immigration is a federal matter, but the city has a responsibility to help the people who arrive.

Asylum seekers in Ottawa have been staying in makeshift shelters in community centres. The city is looking at building a tent-like “newcomer welcoming centre” in Nepean, but it will be months before it is operational. In the meantime, city staff say they are expanding the amount of transitional housing in Ottawa in order to move people out of places like the Heron Road Community Centre.

“Let’s never forget that we are a welcoming community,” said Sutcliffe. “Let’s never forget that the families and individuals who come to our city are our future employees, our future entrepreneurs, and our future leaders.”

Mayor touts low property tax increase in recent budgets

Sutcliffe said he was proud of the fact that Ottawa has had lower property tax increases than other major cities in Canada.

“You may have heard in the last couple of weeks that Toronto is looking at a tax increase of almost seven per cent this year. That’s on top of a 9.5 per cent tax increase last year. In Ottawa, our average property tax increase over the past three years has been less than three per cent,” he said.

The 2025 budget included a 2.9 per cent property tax increase plus a hike to the transit levy equivalent to another one per cent. The city said the budget came with a total of $208 million in savings through service reviews and improvement initiatives. It also includes, however, a $36 million gap for transit operations that Sutcliffe hopes will be filled by other levels of government, though no confirmation of any funding has been secured.

Some councillors have said in past budgets that low property tax caps are putting strain on the city’s ability to finance services, but Sutcliffe said Tuesday that everyone is facing rising costs and the city should not be adding to it through higher taxes.

“Over the past two years, we’ve found more than $207 million in savings and efficiencies. That’s a 10.5 per cent tax increase that we did not pass on to you and to other residents and small business owners,” he said. “That $207 million is a savings of more than $400 per household in Ottawa… At a time of rising costs and economic uncertainty, we simply can’t add to the burden of our residents and our small business owners with big tax increases.”

He closed by saying that Ottawa is facing many challenges, but those challenges create opportunities.

“And I believe Team Ottawa is ready to take them on,” he said.

--With files from CTV News Ottawa’s Austin Lee