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Returning to the office isn't the answer to Canada's productivity problem—and it will add pressure to urban housing

As companies face pressure to increase productivity, —even though there is limited evidence that return-to-office policies actually improve innovation or performance.

In cities like Toronto and Vancouver, where many major companies are headquartered, this is putting pressure on people to live near expensive downtown areas.

As of April 2025, . If return-to-office policies continue, more workers may be forced into these pricey city centers, adding pressure to already overheated housing markets.

Since early 2025, return-to-office policies have added to Canada's housing stress. The Royal Bank of Canada, for instance, , and . While rents haven't jumped yet, similar policies in the U.S. have already pushed up demand, and may be a sign of what's to come.

In Washington, D.C., rents rose 3.3% . Cities like and also saw rent increases linked to companies like , and reversed remote work policies.

The myth of office productivity

According to the Bank of Canada, . Low productivity and keeps wages low. It also . A productive economy meets demand more easily, keeping prices stable.

In response, many companies are pushing return-to-office as the answer. back in 2023, saying that "the absence of working together" has hurt innovation and productivity.

At Google, under mounting pressure to compete in artificial intelligence, , calling a 60-hour week the "sweet spot" for productivity.

But recent research shows the story isn't so simple. , which hurts innovation.

Another study of 48,000 knowledge workers in India found that hybrid setups—where some people are in the office and others work from home—.

Meanwhile, a Stanford-led study found that .

Where people live matters more

Return-to-office mandates also aren't a guaranteed way to boost productivity. A 2023 study supported by housing organizations across Canada .

, especially for lower-income workers. Long commutes and high living costs create stress, limit mobility and cause people to miss out on job opportunities.

Studies show that investing in technology and training workers matters much more. Research from the Canadian Research Data Center Network finds that .

also shows that high housing costs make it harder for many people to live in big cities, which ultimately reduces diversity in the workforce and weakens the economy.

Affordable housing could boost productivity

Housing in Canada . One treats it as a commodity, where prices follow supply and demand. In this view, policies focus on increasing supply and offering market incentives. The other sees housing as a public need and a basic right, and calls for government action to ensure affordability and stability.

In practice, market forces can undermine policies designed to meet housing needs and ensure affordability. In Toronto, for example, that require or encourage developers to include a certain percentage of affordable housing units within new residential developments. Instead, they delayed projects or chose to build high-end condos in different zones.

This tension between housing as a commodity and housing as a public good is central to Canada's current housing strategy. Prime Minister Mark Carney's government has pledged to using tools like public lands, modular housing and tax incentives.

While this supply-focused strategy targets long-term housing needs, it must also account for today's complex economic realities such as , and economic stagnation due to lagging productivity.

Without tackling affordability and access directly, building more homes alone won't be enough.

The real foundation of a productive economy

Return-to-office policies often focus too much on one thing: how much each worker produces. But that narrow view of productivity ignores : access to affordable housing, time for training and flexibility to relocate for better job opportunities.

To address productivity challenges, companies should invest in job-specific training, digital skills and ongoing learning to help employees adapt to new tools and processes, and they should offer more flexibility. What workers need most are affordable homes, shorter commutes and real opportunities to grow—not added stress and rising costs.