With the Ottawa business community holding its collective breath ahead of Monday’s federal election, the resulting Liberal minority government has some around the capital letting out a “sigh of relief” as local observers expect continuing economic growth from the region’s largest employer.
Pre-election jitters could be felt throughout the Ottawa Conference and Event Centre last week as attendees of the Ottawa Real Estate Forum weighed the potential impacts of a change in government on the National Capital Region’s office market.
Nathan Smith, a senior vice-president at Cushman and Wakefield Ottawa, moderated a panel at the forum about the feds’ office space demands in the coming year, in which the prevailing response to his questions was an ambivalent “ask me next week.”
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Reached for comment Tuesday, Smith cheered the “status quo” result of Canada’s 43rd federal election.
“Short of a Liberal majority government, we think a Liberal minority government is probably the best outcome for the commercial real estate business,” Smith said.
Leasing activity and other public sector operations will likely be unaffected by a minority government that sits just 13 seats shy of a majority mandate, Smith said. A Liberal victory secures the city’s commercial sector against threats of Conservative cuts – Tory leader Andrew Scheer said he’d slash the amount of federally leased office space by 30 per cent – and the city’s low unemployment rate should remain relatively undisturbed.
“The worst outcome for Ottawa would’ve been a change in government,” Smith said. “We didn’t want an election. Things were really good in Ottawa.”
He added that Ottawa’s big infrastructure question – securing government funding for phase three of light-rail transit – should be quickly resolved through an incumbent Liberal government with a supportive NDP holding the balance of power.
“It should easily smooth the way to get the third phase of LRT funded.”
On the residential side, the head of the Greater Ottawa Home Builders’ Association said Tuesday he’s expecting no slowdown in demand for new builds as a result of the election.
Jason Burggraaf told OBJ the National Capital Region is in the middle of a homebuilding hot streak – Ottawa is on track for its best year in at least a decade, CMHC recently reported – and recent activity in the local housing market gives him no pause in projecting continued momentum for Ottawa builders.
“We usually see a slowdown in resales in the lead-up to the election. We didn’t see any hesitation like that in the buying public, so I don’t expect to see it now that the government is settled,” Burggraaf said.
Ottawa Real Estate Board president Dwight Delahunt took a wait-and-see approach to the impact on the city’s housing market. It’s “too early to predict” any fallout from the election, he said in an emailed statement, depending on which alliances the Liberals opt to form as they govern. Delahunt noted that several parties made housing promises over the course of the campaign, many of which could either help or stall the local residential market if adopted.
Delahunt also said the status quo is the best-case scenario for now.
“A change in government would have had a more significant short-term impact and having the same government, even in a minority position, keeps consumer confidence steady,” he said.
With public sector employment expected to remain consistent heading into the holiday shopping season, one local analyst believes Ottawa’s retail sector will benefit from the election results.
“I think that economically speaking, especially about retail spending, it’s a sigh of relief,” said Barry Nabatian, the director of market research at Shore-Tanner & Associates.
Based on his conversations with local businesspeople, Nabatian said he heard significant concern that a potential Conservative government would’ve hurt business confidence, which would in turn lead to job cuts and lower spending.
While few are expecting a Liberal minority to bring Ottawa to new economic heights, local observers such as Nabatian are satisfied that the next few months will be business as usual in the nation’s capital.
“I think that we can expect a reasonably good – not excellent, but a reasonably good – retail sector the rest of this year and the Christmas season,” he said.
– With files from David Sali
