What a telecommuting workforce could mean for Ontario

Ontario’s biggest tech company says it’s now going office-optional. If this is going to be our new normal, that could mean huge changes to provincial policy and politics
By John Michael McGrath - Published on May 22, 2020
Ottawa-based e-commerce company Shopify has announced that its headquarters will be closed until 2021. (Lars Hagberg/CP)

Comments

X

Over the span of a few days this week, some of the largest tech companies on the continent (and in the world) made it clear that they don’t expect to go back to “normal” after the pandemic has passed. In Ottawa on Thursday, Canadian e-commerce giant Shopify announced that not only will its office be closed until 2021, but also that it intends to have its staff work primarily from home even when COVID-19 no longer stalks the borders of our public lives, ready to pounce.

Not much later in the day, Facebook (in San Francisco) announced something much the same; CEO Mark Zuckerberg added that the company will be actively recruiting people outside the Bay Area in the future. That follows on announcements from other tech companies, and it’s no surprise that tech firms would be the first to announce the death of the head office. The question is whether and to what extent other firms will follow.

There’s reason for skepticism here: people have been predicting the end of the office for a while now, and it’s been surprisingly resilient in the face of ever-improving internet technologies (and evidence that home workers are more productive). Indeed, for the last decade, the trend has been the opposite: big tech firms providing ever-more opulent amenities in their own campuses or locating in the choicest parts of amenity-rich cities to lure workers.

Now, safety in the home is the ultimate amenity, and employers who can are providing that, too. Still, for all the announcements this week, this could be a passing fad, and the desire to bring people back together in a single office could return the exact moment we have a vaccine. 

But governments probably want to think hard about what this could mean if it is, in fact, the next new normal, because the effects of a broad shift to home-work would have enormous effects on all sorts of areas of public policy — effects politicians may not yet have considered.

The obvious place to start is transportation planning. The province is, even now, spending billions of dollars on GO Rail investments whose ultimate purpose is to get more commuters into Toronto’s downtown core (and back out) every day. Something like half of Toronto’s jobs were in the office sector last year, and it was the most rapidly growing part of the city’s economy, so getting people into the city more efficiently made sense.

What’s the value of those investments in a world where working from home has become the norm? Premier Doug Ford’s darling project, the proposed Ontario Line, should be subjected to at least as much scrutiny on the same basis. This would be true even in a world where lots of people still work in the city’s office core, just not as much as we’d expected: these projects are justified not just by current use, but by growing demand in the future. So, even if the total population of office workers downtown doesn’t shrink that much, a lot of our planning could come into question.

Potential changes get even more profound if we take Facebook’s announcement, in particular, seriously. The digital goliath, as well as other Silicon Valley tech firms, had already been exploring, with mixed results, ways to move some of its workers to cheaper locations before the pandemic hit. If big companies with armies of white-collar office workers start seriously preferring at-home work, specifically because of the cost savings from workers willing to take slightly less pay to work in much cheaper cities, that could reverse decades of economic and demographic concentration in the GTA. A boon for smaller cities that aren’t within sight of the CN Tower, if they can manage it, but it’s a taller order than it sounds: a few thousand upper-income families formerly from Toronto looking for homes in a smaller Ontario city could totally distort the local housing market, unless there were lots of new construction to make up for the new arrivals.

And then there are the effects on the places left behind. If wealthy core cities, such as San Francisco and Toronto, suddenly start hemorrhaging residents and workers (and with them, tax revenue) to more peripheral regions, that would be, in large part, their own fault for having let their housing prices spiral out of control in the first place. But that would provide no solace when city councils face the daunting prospect of needing to cover the sunk costs of infrastructure and services on a shrinking tax base — requiring either cuts to spending or painful tax increases, either of which could themselves become a new reason for even more families to leave the city. A “death spiral” dynamic that’s familiar in big utilities is a real possibility for cities.

The people left behind could suffer, too. Those office towers don’t run themselves, and the people who keep them running — from mechanics and security to cleaners and food workers — could all find their own jobs disappearing while the white-collar jobs are merely relocated. The severity of the job losses there would depend on how substantial the trend to working from home actually was.

If all this sounds like a lot to draw from the actions, so far, of only a few large employers, well, it might be. But, starting with the electric streetcar in the late 1800s, then subways, and later expressways and mass-automobile ownership, nothing has reshaped our cities more than changes to major commuting technologies. If telecommuting joins that list, it will have similarly profound effects.

For now, one thing that’s likely going to keep workers clustered in Canada’s big cities is the fact that, outside of those area codes, this country’s internet service is simply abysmal — well below the standards we would need to allow really seamless telecommuting, especially in rural parts of the province. But governments of different parties — the Tories at Queen’s Park, the Liberals in Ottawa — are both committed to improving rural broadband, and a world in which big employers are aggressively trying to hire outside big cities is also a world in which telecom companies suddenly have a big incentive to invest in more rural capacity. In any event, it would be perverse to pin Toronto’s future on keeping rural Ontario in the internet dark ages.

Whether any of this actually comes to pass depends on a lot of different factors beyond anyone’s control. But the fundamental question is whether COVID-19 has changed everything beyond recognition (a big claim that needs big evidence) or simply accelerated trends that were already underway. Maybe the future was always there, just waiting for someone — or something — to find it.

Related tags:
Author
Thinking of your experience with tvo.org, how likely are you to recommend tvo.org to a friend or colleague?
Not at all Likely
Extremely Likely

Most recent in Coronavirus