On this episode of REALtalk, Stéphan Déry, Assistant Deputy Minister, Real Property Services, Public Services and Procurement Canada, joins Michael Brooks, CEO of REALPAC, for a discussion on the future of work and real estate, talent retention and recruitment, and enhancing the workspace to facilitate collaboration.

The episode covers:

• The hybrid work model
  
• The future of work and real estate
  
• Trends across Canada and internationally
  
• Talent retention and recruitment
  
• What optimal workspaces look like
  
• The Office portfolio
  

Stéphan Déry was appointed Assistant Deputy Minister of Real Property Services at Public Services and Procurement Canada (PSPC) on August 19, 2019.

In this role, Stéphan is responsible for the delivery of the entire suite of real property services to federal departments and agencies, including office accommodation, project management, real estate services and specialty services (geomatics, environmental, architectural and engineering), the management of multiple federal engineering assets (bridges, dams, highways and dry docks), as well as the acquisition and disposal of federal real property.

Stéphan also provides leadership for the Government of Canada’s GCworkplace initiative and the development of the workplace of the future. He is passionate about the importance of providing modern, green and accessible workspaces for employees and enabling a hybrid work environment that fosters innovation, collaboration and productivity in the new post-pandemic reality.

Stéphan is the Co-Chair of the Federal, Provincial and Territorial Real Property Committee. He is also a staunch supporter of The Workplace Network, an international community of senior public sector real estate executives, of which he is the current President.

Stéphan is a certified management accountant and holds a master’s degree in public administration.

Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC.

I’m pleased to be joined today by Stéphan Déry. Stéphan is the Assistant Deputy Minister, Real Property Services at Public Services and Procurement Canada, a position he has held since August 19th, 2019. Yes, the pandemic hit six months into his new job. Stéphan is responsible for delivery of the entire suite of real property services to the federal departments and agencies, including Office accommodation, project management, real estate services and specialty services such as gymnastics, environmental, architectural and engineering, and the management of multiple federal engineering assets such as bridges, dams, highways and dry docks, as well as the acquisition and disposal of federal real property. Big job. He’s passionate about the importance of providing modern, sustainable and accessible workspaces for employees and enabling a hybrid work environment that fosters innovation, collaboration and productivity in the new post-pandemic reality. Stéphan is the co chair of the Federal, Provincial and Territorial Real Property Committee. He’s also a staunch supporter of the workplace network and international community of senior public sector real estate executives, of which he is the current president. Stéphan is a certified management accountant and holds a master’s degree in public administration. Wow. Welcome, Stéphan.

Stéphan Déry (PSPC): Thank you, Michael. It’s a pleasure to be with you today.

Michael Brooks (REALPAC): All right. Let’s get into this. So so government officials have clarified that hybrid work, the hybrid work model, some days working in the office, some days working at home or other remote locations will be the way forward within the Canadian federal government. Some in the real estate space think the pendulum will swing to the workforce. Being back in the office maybe five days a week within the next couple of years. What’s your view of that and how do you see your role in providing flexibility to federal workers?

Stéphan Déry (PSPC): Well, first of all, thank you, Michael. Extremely interesting question from my perspective. I’m passionate about the future of work and real estate. So to me and I’ll answer quite quickly, I’ll give you a little bit of a background after that, five days a week in the labor shortage that we have, I’m not so sure what we see, the trend we see around the world. But just to start in Canada, most governments, provincial government have decided Ontario, Quebec, British Columbia, they all decided on a 2 to 3 days a week in the office with more flexibility. And some of the reason for that is to attract and retain talent, because we’re all in competition for the same talent pool. So how we can implement that, if we look a little bit in the international perspective, you know, as you mentioned, I’m a current president of the Workplace Network and we’re seeing that most countries have adopted a hybrid model. And it’s not only for from a building perspective, it’s not only from a government perspective, it’s also from a perspective, again, of attracting that talent and being a little bit more flexible with the employee and looking what they’re looking for. Like the UK is, as an example, is retaining the worst place. Leigh How to really focus on hybrid, how they can, how they can create an environment and they call it the four C’s that will foster collaboration, creativity, community and caring for one another. So and that for CS stayed with me because, you know, if you go back to 2019, 2015 and all that, these are not the reason you were going into the office.

Stéphan Déry (PSPC): You know, collaboration. Yes, You were going for collaboration, but caring for one another community building, as one of my colleague was saying, it’s something you would do somewhere else. So it brings us to rethink our offices and bring really a mother in. Look. If you look at Norway, Norway is the same way. They’re going 2 to 3 days a week in the office and they’re starting to rethink their work environment in order to favor that collaboration between between employee and their manager and their senior management. And the last example I use, it’s the U.S. are our neighbor, GSA Government service agency. They’ve also started to look at how work can be done. And they develop a plan for 2030 that basically states that work can be done anywhere. And they’re rethinking about how how will we implement that hybrid workplace and what it’s going to look like. Last week they launch an innovation center in in the Washington of 25,000 square feet where they want to showcase what the future will look like. And that’s enabled by technology enabled, you know, great work area, great workplace. So that’s really, to me what the future look like, more of the Government of Canada building instead of each department having their own little space and really focusing on bringing people in for collaboration, creativity, innovation. That’s what’s really we’re looking for by modernizing our workspace.

Michael Brooks (REALPAC): This sounds very, very progressive and very thoughtful. You’ve clearly thought about this and consulted widely. Quality of space. How will you repurpose space to make it, as you say, more useful, effective, attractive. The four C’s for returning hybrid employees. So and are you having any pushbacks if you’re seeing any of that so far?

Stéphan Déry (PSPC): Thank you. Thank you. Again, it’s an interesting question, that workspace a lot of our Government of Canada workspace is from the 1990, early 2000. So while other governments were adopting activity based workplace, basically more collaboration and you know flexible workspace and also unassigned seating, we launched it here in 2016 and, you know, we started we have about 10% of our workspace that are modernized to the kind of activity based workplace that we were looking for. But the pandemic and I called it the largest telework pilot project ever done around the world. You know, it was although it was a terrible event on the other end, it created a it helped us to advance what we were thinking was the right way to go at activity based workplace like the rest of the world is doing right now, and really leverage that new ways of working and that new space we want to build. Really, it’s. People do not want to come back in their cubicle and clothes work heads down all day. They could do that from home. They can think from almost anywhere they want to come in to collaborate. So how do we create that workplace that looks more like an open space where people can sit together, exchange ideas, resolve problem? You know, I think that and I had the opportunity in in 2022 to be part of a presentation by JLL Global Research and Dr. Mary Primero, and they had made a survey of about 16,000 office worker around the world, including governments and all business with more than 100 employees. And the finding of their research to me was pretty clear. And it goes to the war for talent. Also, we’re moving to into a workers centric world in which successful organization will be those that put people first.

Stéphan Déry (PSPC): And you saw it with the great resignation and all that. I mean, it’s slow down because there’s the the economic slowdown that we have economic slowdown in the in the in multiple country. But it’s still employers are focusing on what do we need to be a magnet our real estate to be a magnet to attract employee real estate needs are becoming more sophisticated than complex, and investing in quality space will be greater priority than expanding total footprint. And that resonated for me. In the government, we have 6.2 million square meter of office space across the country. I see a future where as we recapitalizing and as we are working with the private sector, we get into smaller space, less space. I’m not saying smaller space, space per FTE per employee, but I’m thinking a smaller footprint, but a lot higher quality footprint. Now, my colleague in the US was saying there’s a flee from, you know, a lower class space to class A space, and people are going to higher quality space again to attract and have the ability fully it enabled. Another thing that was important in their research was also the environmental and social aspiration will shape the future portfolio transformation. So we have to keep that in mind and I hope we’ll have a chance to talk about greening, accessibility and indigenous reconciliation and the last finding of that research, which in line with our portfolio plan for the Government of Canada, is really all the technology investment that need to be made if we want to get in that era of collaboration, but having more of a dispersed workforce across the country.

Michael Brooks (REALPAC): So let’s let’s go actually into two of those points. You brought up the accessibility point and what you want to see in future office space for the civil service and and the decarbonization piece both as a as an attractor for talent, but also as a as an imperative in your job. How do those two items particularly play into your future plans?

Stéphan Déry (PSPC): Well, I think, Michael, that our modernization of our portfolio, which we have undertaken, I would say about five years ago at a greater scale, if you come to Ottawa, where 3.2 million to those 6.2 million square meter are, you’ll see that there’s almost grain everywhere, not in every public building, but in a lot of our public building goes hand in hand. Really, that modernization goes hand in hand with the government top priority accessibility, greening, reducing our environmental footprint. So for me, it’s it’s quite important that while we’re thinking of the future of the portfolio, how much space we’re going to use, that we ensure that we have a vision that is green, that is accessible. So everything we do really is to try to take a leadership role for the Government of Canada by considering decarbonization in the design and approval stage of any project we’re doing. And I’ll give you an example in Toronto 25 Sinclair You know what we’ve done there? This building will be carbon neutral. Ready? It will include a gender neutral washroom on every floor. It will be fully accessible. We even taught through the design of this building. The sidewalk in front of the of the building would have a loop to eat the sidewalk.

Stéphan Déry (PSPC): So and, you know, like it’s a closed loop of energy to ensure that there’s safety for people coming to the building because it’s going to be a building open to public. Another of our project that would be critical for us and that we’ve been working on to even advance our greening is the district energy system, the system which provides heating and cooling services to many of our building. I would say over 80 building in Ottawa. Gatineau are either then cool by this system will help us achieve a reduction of 92% of GHG by greenhouse gas emission, 92% reduction by 2025. Why? Because we you know, we are doing major renovation. It’s heating plan that dated from 19 early 1900 to 1950, like higher technology, better equipment. But we’re also doing an electrification of some of our heating plan in order to make these eating plan greener on accessibility. As I said, all of our projects have accessibility to land, have really to make sure that our space are inclusive and that are favored. The design that is fully inclusive, obviously, and as you may expect, and it’s going to take time to get there. It’s going to it’s an endeavor we’re looking to be to have our building fully, fully accessible by 2040.

Stéphan Déry (PSPC): And the lot of those when you talk about gender neutral washroom, when you talk, it needs code change. You know, Canadian, the construction code need to be changed. The labor code need to be changed. So there’s all all initiative in motion to ensure that we’re aiming for that. And as soon as we do renovation, we have that in mind greening reduction of greenhouse gas emission and also the accessibility. One point I would like to say for our colleagues in the private sector, we also we own a fairly large portion of the portfolio without half leased and half own. So of that 6.2, about 3 million is leased and we’re also looking for greening there. So there’s a policy now that by 2030, you know, all renewed lease, 75% of our 70 or 75% of our renewed lease or new lease will have to be carbon neutral. So we have to work also with industry and the private sector to ensure that they’re able to meet those requirements come 2030, and that when we enter a new leases that we get carbon neutral in order for the government to reduce their environmental footprint.

Michael Brooks (REALPAC): No, terrific. It’s a terrific back story and it’s very likely that your initiatives, these initiatives will move the market. They will have to move the market. Those folks who want to be a service provider to the federal government will need to bring their A-game in accessibility and in decarbonization, it seems to me, if they want to have you as a tenant in their buildings going forward, let me finish on on a point of evaluation again, going back to the high. Good work force and your plans to make sure that you can attract your employees back to the office, that it’s functional space Based on that ForeSee Characterization How will you evaluate success in in that part of your initiative, in your quality of space decisions and your quantity of space decisions going forward?

Stéphan Déry (PSPC): And this is a really an interesting question because somebody said at one point what get measure gets done. So if you don’t want to evaluate success, how can you know if you don’t aim to get to somewhere and you can’t measure if you got there, if you get there. So you really need to to be able to measure success. Right. And we just talk about some of the point that we’ll look to measure success, reduction in our energy footprint of our environmental footprint. That’s going to be key to us in moving to higher quality space probably and less space, less total footprint, but a higher quality that is a lot more accessible and that is green and also favor indigenous reconciliation. So this to me is one key and that’s fairly quantifiable. You know, that’s not the qualitative aspect of it, but it’s really quantifiable how many GHG emission you have and all of this. So that’s key. The other aspect of it is a little bit more qualitative that the space that we have meet the need of the occupant and the space that we have also help to attract and retain talent. And how do we know that is basically by by doing survey with employee measuring how the space gets used, space that is flexible enough that if we know, let’s say we have an area with couches where people can talk, it’s not being used, we can reconfigure it.

Stéphan Déry (PSPC): And also this will drive. You know, I talk about qualitative, I talk about quantitative, qualitative. And one of the most important for us as a qualitative quantitative measure is the rate of utilization. If you know we have GC coworking now that we’ve opened around Canada, there’s nine side of those that are multi departmental. So if you are a member for some department, you can go in, you can use them, you reserve a space and those are right now they’re full at 92%. So that tells me that know and my average utilization pre-pandemic for all of my building was about 60%. So if those are used at 92%, that mean if I open more of those, it’s going to increase. And that’s what people are looking for. It’s going to increase my utilization rate. And that’s really what we’re what we’re looking for as managing of public funds is maximize the use of our square meters or square feet and ensure that people that are happy using them attract them. You know, space being a magnet is something I think we can create with our colleagues in the private sector and really attract people to come and work in our buildings.

Michael Brooks (REALPAC): Terrific. A terrific approach. And boy, it just seems to me that our federal government’s real estate is in good hands, end with you manning the ship there. And those are great words to finish on. So let’s finish on that. It’s been a pleasure to have you on today, Stéphan. Thank you so much.

Stéphan Déry (PSPC): Thank you very much, Michael.

Michael Brooks (REALPAC): Well, this is Michael Brooks, and that’s it for this week’s episode of REALtalk. Be sure to visit us at realpac.ca/REALtalk and subscribe wherever you get your favorite podcasts. If you have an idea for a topic or a guest, please send me an email at podcast@realpac.ca. And if you like what you hear. Give us a 5-star rating. Thank you for listening and tune in next time.