Commission on the Reform of Ontario's Public Services

Real Estate
The government of Ontario is the largest owner of realty in the province. This portfolio is a
collection of valuable assets, worth an estimated $14 billion including $2 billion for the land
alone. 13 The province’s real estate holdings include office buildings, jails, courts, hospitals
and more. These buildings are an important tool in the provision of services to Ontarians.
For all of its value, the real estate portfolio also poses challenges. Most buildings are old,
with the average age being 46. Consequently, buildings are expensive to maintain properly.
In 2010–11, the province spent $842 million to operate and maintain those assets.
Reductions in maintenance only offset the inevitable expense of upkeep and can lead to more
costly problems down the road; this is true even for buildings that are underused, vacant or
which the province has no plans to use in the future. Real estate can therefore represent a
costly proposition. Practices that maximize the value generated by these assets are
therefore needed.
Rational incentives must be put in place to encourage more efficient use of current space.
We learned that ministries are charged below market rates for use of government buildings,
suggesting that more office space is being used than should be if ministry budgets were forced
to consider its full cost.
Recommendation 12-7: Subject ministries to market prices for the use of government
real estate.
There are also buildings owned by the Ministry of Infrastructure but managed and used by a
second ministry to deliver a program or service — jails and courthouses being prime
examples. This has created unnecessary duplication across ministries in administrating
payments for accommodation and capital repairs. Such an arrangement also inhibits the
government from taking a more integrated approach to rationalize the use of real estate. 14
Recommendation 12-8: Consolidate the real estate and accommodation function now resting
in line ministries and locate it centrally at the Ministry of Infrastructure.
13 Information in this chapter has been provided by the Ontario Ministry of Infrastructure unless otherwise cited.
14 For more on justice sector-related buildings, see Chapter 14, Justice Sector.
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