Manitoba Shared Health paying more than $1M in annual rent for offices left empty
Health-care organization says long-term leases are expiring soon, at least 1 won't be renewed
The organization that oversees health-care delivery in Manitoba is spending more than $1 million a year on office space it is no longer using.
Shared Health is paying rent for six locations in downtown Winnipeg, two of which are long-term leases for spaces that are now vacant, according to part of an internal document titled "Working from Home & Lease Consolidation" obtained by CBC News from a government source.
The rent totals $2 million for all six properties, including the two that are empty. In the rest of Shared Health's offices, less than 40 per cent of the space is utilized, the document reports.
The organization has 890 corporate and administrative staff, the majority of whom are still primarily working from home.
Downtown Winnipeg BIZ head Kate Fenske wants the unoccupied offices to be repurposed.
"I think empty offices are concerning. Empty offices, empty parking lots don't serve anyone. They're not helpful," the business improvement zone's CEO said.
"If those buildings are not going to be used, we'd rather see them shifted into some other form … whether it's housing or community spaces for arts, culture."
81,000 square feet sitting empty
The largest office space in Shared Health's portfolio is at 355 Portage Ave. — the Air Canada building at Hargrave — where the organization has 54,000 square feet across two floors. No employees work out of that office, where the annual rent is nearly $787,000, the internal document said. Data centre staff continue to work out of the seventh floor, Shared Health said.
The organization also has nearly 27,000 square feet of unoccupied space just across the street at 330 Portage Ave., which costs $446,000 a year in rent.
A spokesperson said Shared Health assumed responsibility for the leases when eHealth and Digital Health services came under its purview in the 2018-19 fiscal year.
[The] provincial government is trying to find ways to improve health care.… A good place to start is probably not paying rent for offices that no one uses.- Gage Haubrich, Canadian Taxpayers Federation
The offices haven't been consistently used since the COVID-19 pandemic began. Shared Health said the 10-year lease for two floors at 355 Portage will expire at the end of this year. The nine-year lease for the other office ends in February, but no renewal decision has been made.
Shared Health is reviewing its leased office space because its needs have evolved, a spokesperson said.
Downtown Winnipeg was hollowed out by pandemic restrictions that pushed office workers, including Shared Health's corporate and administrative staff, home. While some employees have returned downtown on a full-time basis, others have hybrid work arrangements or are fully remote.
The shift to hybrid work prompted Manitoba Liquor & Lotteries, a provincial Crown corporation, to consolidate three office locations into one. Ninety per cent of employees at 1555 Buffalo Pl. work under a hybrid arrangement.
Gage Haubrich, Prairie director for the Canadian Taxpayers Federation, said offloading unused office space should appeal to the recently elected NDP government.
"[The] provincial government is trying to find ways to improve health care in the province, and a good place to start is probably not paying rent for offices that no one uses," Haubrich said.
Health Minister Uzoma Asagwara wouldn't cast blame for the situation, but said it is being reviewed, along with other areas related to health-care staffing and work locations.
The New Democrats, though, have targeted health-care administration costs, vowing to redirect some money to the front lines of health care.
Shared Health, an entity created by the former PC government during its overhaul of health care, initially bore the brunt of that criticism. At one forum prior to October's election, now Premier Wab Kinew promised to cut administration at the organization.
"Probably most people in the room couldn't even tell you where the front door to Shared Health is," he quipped.
The NDP has since walked back that pledge, now promising to reduce bureaucratic costs but not singling out Shared Health.
64% of office staff primarily at home
The internal document also shows 64 per cent of Shared Health's downtown Winnipeg staff are primarily working from home, which is higher than most other provincially funded workplaces.
For example, most of the 1,800 workers at Manitoba Hydro's downtown highrise have a hybrid arrangement. As of February, so will a large majority of the Manitoba Public Insurance employees based downtown.
However, about 70 per cent of Efficiency Manitoba's 80 employees are primarily remote workers. That Crown corporation, which began operating during the pandemic, said it only has enough leased office space to accommodate some staff.
The Winnipeg Regional Health Authority said 60 per cent of its employees at 650 Main St. were in the office at least one day a week, based on a recent snapshot. The health authority said it couldn't classify the remaining 40 per cent because of variations in schedules.
The Southern Health, Interlake-Eastern and Prairie Mountain health authorities said at least 85 per cent of their non-front-line staff are in the office on a part-time or full-time basis. The Northern health authority didn't answer all questions by deadline.
'Sense of unfairness' over rules: prof
Lori Turnbull, a Dalhousie University professor in political science and public affairs, said the work-from-home era shook up hierarchical organizations like the public service.
Employers ceded control over employees' time and space, and some of those workers are reluctant to return to the old system, Turnbull said, which has even prompted some to leave their jobs.
But the variations in work arrangements in Manitoba's public service may breed discontent, she said.
"I think as much as there's that inconsistency, people might feel a sense of unfairness," Turnbull said. "Why do they have to go [into the office] five days a week when I don't?"
Asagwara said they understand some people may be concerned by the differences.
"My priority is less comparing organizations to one another and more on 'how do we make sure that Manitobans have the best health-care possible in Manitoba?'" the health minister said.
"How do we make sure that health-care workers across the board are able to do their jobs in the best ways possible?"
Asagwara, the MLA for the downtown Winnipeg Union Station riding, said the government will balance those considerations with its responsibilities to support the city's core.
Research from the Downtown Winnipeg BIZ suggests roughly two-thirds of downtown employees are in the office at least part time.
Wendell Cox, a public policy consultant in St. Louis who has studied the shift to working from home, said the province shouldn't try to build up downtown Winnipeg on the backs of public servants.
"Government tries to do things for some people that it does not have the interest or capability of doing for others. All I'm saying is, whatever it does for downtown, it has an obligation to do for every other place, and it doesn't have the capability," Cox said.
Progressive Conservative health critic Kathleen Cook said the government should conduct an analysis on the working arrangements of non-front-line health-care staff to ensure productivity and the health-care system aren't suffering.
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