How exposed is Ottawa–Gatineau to federal policy, and what is happening in its housing and labour markets?
Ottawa–Gatineau's economy rests on the federal public service, which the federal government says had shrunk nationally by nearly 10% from its 2023-24 peak by August 2026, at the same time as the region's rental vacancy rate has risen and its housing supply gap has widened
Graphic: The Ottawa–Gatineau economy: a government-centred region facing pub…
What happened
Ottawa–Gatineau's unemployment rate was 7.1% in October 2026 and employment was 868 thousand, 0.9% on a year earlier. The metropolitan population changed 2.3% in the year to July 2025. The average two-bedroom rent in purpose-built rental apartments was C$1,757 in the October 2025 survey with a vacancy rate of 3.1%, up from 2.3%. Units under construction were 21,758 at the end of September 2026.
Why it happened
The federal government's Budget 2025 says the federal public service grew by more than 40 per cent between 2015 and 2024, double the rate of economic growth, and plans a reduction from a peak of almost 368,000 positions in 2023-24 to roughly 330,000 by the end of 2028-29, a decline of about 10 per cent. Budget 2026 says that as of August 2026 the public service had fallen by nearly 10% from that peak, to about 332,000 employees, according to reporting by the Treasury Board Secretariat. These are national figures; neither budget says how many of the positions are in Ottawa–Gatineau, and the Treasury Board's regional count is in the local-economy section.
Evidence: Department of Finance Canada: Budget 2025, Chapter 5: Comprehensive Expenditure Review (Canada Strong); Department of Finance Canada: Budget 2026, Chapter 6: A more efficient government
CMHC's rental report says that in Ottawa the vacancy increase was partly caused by an increase in new completions along with a slowdown in demand, that the number of non-permanent residents fell sharply in Ontario and was probably also true in Ottawa, and that the higher unemployment rate in the area may have slowed rental demand; for the Quebec side it says the softening was due to an increased supply of new rental units combined with demand that didn't keep up, with slower population growth and rising unemployment. CMHC's own hedged wording ("probably", "may have") means these are inferences, not measurements.
Evidence: Canada Mortgage and Housing Corporation: Rental Market Report 2025: major centres (web edition)
Statistics Canada reports that the Ontario part of the Ottawa–Gatineau area saw the largest increase among Ontario areas in its share of new immigrants to the province, rising to 12.5% in 2024-25. The components of the metropolitan area's population change are in the population section: net non-permanent residents were 2,922 in the latest demographic year against 22 thousand a year earlier.
Evidence: Statistics Canada: The Daily: Canada's population estimates: Subprovincial areas, 2025
Why it matters
CMHC's fall 2026 Housing Supply Report says Ottawa continues to face a significant housing supply gap despite a high level of recent construction, that the gap has widened because of a decline in affordability driven by higher mortgage rates and slower income growth, that rental units accounted for 54% of starts while condominium apartments were just 12%, that the number of units under construction is at an all-time high, and that a new citywide zoning bylaw allows up to four units as of right on most serviced residential lots.
Evidence: Canada Mortgage and Housing Corporation: Fall 2026 Housing Supply Report
The pattern across these statements is a building cycle sized for faster population growth meeting slower demand and a federal employer that is shrinking; the data held here do not show how much of the rental softening comes from each.
History
Ottawa–Gatineau's unemployment rate has ranged from 3.8% (June 2022) to 10.4% (June 2020) over ten years, and the metropolitan population grew 22.6% over ten years.
Budget 2025 also records that the Comprehensive Expenditure Review aims for an estimated reduction of 16,000 full-time equivalents, about 4.5 per cent of the workforce at March 2025.
Across geographies
Ottawa–Gatineau's unemployment rate is 7.1%, against 7.1% in Toronto and 6.9% in Montréal.
CMHC says supply gaps have widened in Ottawa and Montréal.
Evidence: Canada Mortgage and Housing Corporation: Fall 2026 Housing Supply Report
The Ontario budget projects that slower economic growth and lower population growth due to changes in federal immigration policy will contribute to a softer labour market in 2026 and that the unemployment rate will fall from 7.7 per cent in 2025 to 7.4 per cent in 2026; those are Ontario-wide projections.
In October 2026 Quebec's unemployment rate was 5.7% and Ontario's 7.3%, the two provinces whose labour markets the region straddles.
What it influences
CMHC says Ottawa's slower rent growth is also related to the permitted rent increase for units built before 2019 under Ontario's guideline, while the Quebec side's rents were pushed up by a record recommended increase from Quebec's rental tribunal. Rents therefore respond to different rules on each side of the river, which is one reason the combined figure above should be read with the two provinces' regimes in mind.
Evidence: Canada Mortgage and Housing Corporation: Rental Market Report 2025: major centres (web edition)
Risks
The federal plan is a policy choice that could be revised. Budget 2026 projects the decline to continue, and both budgets describe it nationally only.
Evidence: Department of Finance Canada: Budget 2025, Chapter 5: Comprehensive Expenditure Review (Canada Strong); Department of Finance Canada: Budget 2026, Chapter 6: A more efficient government
The Ontario budget says global trade tensions and uncertainty constitute the main risks to Ontario's outlook.
CMHC says Central Canada is more affected by trade risks and is likely to lag, and that historically low levels of construction will be most visible in Ontario and British Columbia, particularly in condominiums.
What to watch
Statistics Canada's Labour Force Survey and population estimates, CMHC's starts and the autumn Rental Market Survey (release calendar), and the Treasury Board of Canada Secretariat's public-service population tables will show how public-sector employment and rental demand develop. No forecast for Ottawa–Gatineau from a primary source is cited, so none is given.
Prepared with AI assistance.
Follow the relationships
- Ontario 9 with evidence · 12 recorded Open in Studio
- Employment 0 with evidence · 0 recorded Open in Studio
Upcoming releases
- 2026-12-04 Labour Force Survey November 2026 · Statistics Canada
Sources for this section (7 datasets, 7 documents)
Data
- Labour force characteristics by census metropolitan area, three-month moving average, seasonally adjusted (14-10-0459-01; 4 series; latest October 2026; retrieved 2026-11-07)
- Population estimates, July 1, by census metropolitan area and census agglomeration, 2021 boundaries (17-10-0148-01; 1 series; latest 2025; retrieved 2026-10-23)
- Canada Mortgage and Housing Corporation, average rents for areas with a population of 10,000 and over (34-10-0133-01; 1 series; latest 2025; retrieved 2026-10-25)
- Canada Mortgage and Housing Corporation, vacancy rates, row and apartment structures of three units and over, privately initiated in census metropolitan areas, weighted average (34-10-0130-01; 1 series; latest 2025; retrieved 2026-10-25)
- Canada Mortgage and Housing Corporation, housing starts, under construction and completions in selected census metropolitan areas, monthly (34-10-0154-01; 1 series; latest September 2026; retrieved 2026-10-23)
- Components of population change by census metropolitan area and census agglomeration, 2021 boundaries (17-10-0149-01; 1 series; latest 2024; retrieved 2026-10-25)
- Labour force characteristics, monthly, seasonally adjusted and trend-cycle (14-10-0287-01; 2 series; latest October 2026; retrieved 2026-11-07)
Documents cited
- Department of Finance Canada: Budget 2025, Chapter 5: Comprehensive Expenditure Review (Canada Strong) (retrieved 2026-11-07)
- Department of Finance Canada: Budget 2026, Chapter 6: A more efficient government (retrieved 2026-11-07)
- Canada Mortgage and Housing Corporation: Rental Market Report 2025: major centres (web edition) (retrieved 2026-11-07)
- Statistics Canada: The Daily: Canada's population estimates: Subprovincial areas, 2025 (retrieved 2026-11-07)
- Canada Mortgage and Housing Corporation: Fall 2026 Housing Supply Report (retrieved 2026-11-07)
- Government of Ontario, Ministry of Finance: 2026 Ontario Budget, Chapter 2: Economic Performance and Outlook (retrieved 2026-10-25)
- CMHC: Summer Update: 2026 Housing Market Outlook (retrieved 2026-11-07)
Each dataset is used under its licence; attribution and series-level detail are in each chart’s “About this data” panel. Limitations: Every explanation here is a statement by the named organisation. The federal figures are national: neither budget gives a split for Ottawa–Gatineau. The Treasury Board's regional count is in the local-economy section. CMHC reports Ottawa (Ontario) and Gatineau (Quebec) separately, and the census metropolitan area spans both provinces; each statement says which side it describes. Metropolitan wages and productivity are not held. Forecasts are the publishers' and are not Northline forecasts. The reduction plan is quoted from Budget 2025, and the national count for August 2026 from Budget 2026, tabled on 5 November 2026.