Manitoba Shared Health paying more than $1M in annual rent for offices left empty

The organization that oversees health-care delivery in Manitoba is spending more than $1 million a year on office spaceit is no longerusing.

Shared Health is paying rent for six locations in downtown Winnipeg, two of which are long-term leases for spaces that are nowvacant, according topart of aninternaldocumenttitled"Working from Home & Lease Consolidation" obtained by CBC News from agovernment source.

The renttotals $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 thespace is utilized, thedocument reports.

The organization has 890corporate and administrative staff,the majority of whom are still primarily working from home.

Downtown Winnipeg BIZ head Kate Fenske wants the unoccupiedoffices 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'sCEO 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 at355 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 isnearly$787,000, the internal document said. Data centre staff continueto 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 yearin rent.

A spokesperson said Shared Health assumed responsibility for theleases when eHealth and Digital Health services came under its purview in the2018-19 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 beenconsistently used since the COVID-19 pandemic began. Shared Health said the 10-year lease for two floors at355 Portage will expire at the end of thisyear.The nine-year lease for the other office ends in February, but norenewal decision has been made.

Shared Health is reviewing its leased office space because itsneeds have evolved, aspokesperson said.

Downtown Winnipeg was hollowed out by pandemic restrictions that pushed office workers, including Shared Health's corporate and administrative staff,home. While someemployees havereturned downtown on a full-time basis, othershave hybrid work arrangements or are fully remote.

The shift to hybrid workprompted Manitoba Liquor & Lotteries, a provincial Crown corporation, to consolidatethree office locations into one. Ninety per cent of employees at 1555 Buffalo Pl.work under a hybrid arrangement.

Gage Haubrich, Prairie director forthe Canadian Taxpayers Federation, said offloadingunused office spaceshould appealto the recently elected NDP government.

"[The] provincialgovernment is trying to find ways to improve health care in the province, and agood 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 otherareas related tohealth-care staffing and work locations.

The New Democrats, though, have targetedhealth-care administration costs, vowing to redirect somemoney 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. Atone forum prior to October's election, now PremierWab Kinewpromised to cut administration at the organization.

"Probablymost 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 promisingto reduce bureaucratic costs but not singling out Shared Health.

64% of office staff primarily at home

The internal documentalso shows 64 per centof Shared Health'sdowntown Winnipeg staff areprimarily working from home, which is higher than most other provincially funded workplaces.

For example, most of the 1,800 workers at Manitoba Hydro'sdowntown highrise have a hybrid arrangement. As of February, so will a largemajority of the Manitoba Public Insurance employees based downtown.

However, about 70 per cent of Efficiency Manitoba's80 employees areprimarily remote workers. That Crown corporation, which began operating during thepandemic, said it only has enough leased office spaceto accommodate some staff.

The Winnipeg Regional Health Authority said 60 per cent of its employees at 650 Main St. werein the office at least one day a week, based on a recent snapshot. The health authoritysaid it couldn't classify the remaining 40 per cent because of variations inschedules.

The Southern Health, Interlake-Eastern and Prairie Mountain health authorities saidat least 85per cent of their non-front-line staff are in the office on a part-time or full-time basis. The Northern health authoritydidn'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 uphierarchical organizations like the public service.

Employersceded control over employees' time and space, and some of those workersare reluctant to return to the old system, Turnbull said, which has even promptedsome to leave their jobs.

But the variations in workarrangements inManitoba's public service may breeddiscontent, she said.

"I think as much asthere'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?"

Asagwarasaid they understand some people may beconcerned 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 responsibilitiesto 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,apublic 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 shouldconduct an analysis on the working arrangements of non-front-line health-care staff to ensure productivity and the health-care system aren't suffering.

Manitoba Shared Health paying more than $1M in annual rent for offices left empty

9 months ago

Duration 2:34

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.