Toronto has come a long way from being a ghost town in early 2020, and while the city appears to be thriving in many departments, the office market is still spinning its wheels as many businesses continue to operate remotely.

A new report from CBRE is revealing just how low the demand for office space is nationwide.

At the close of the year's third quarter, 15.7 per cent of Canada's office space sat vacant, marking the highest figure recorded since 1994 — a time when the country was struggling through a recession and the dot-com bubble.

Things are just as bad in Toronto, where the third-quarter office vacancy rate soared to a worrying 13.7 per cent. This is a huge jump — and not for the better — over the two per cent of Toronto offices that were vacant during the pre-lockdown portion of 2020's first quarter.

Though overshadowed by the rising vacancy rate, the report has a few reasons to be optimistic. CBRE states that confidence is returning to the Toronto office market.

Improvement in demand is being felt in Toronto's downtown market specifically, where upward momentum has been recorded for the first time since the first lockdowns shuttered the city.

The vacancy rate downtown contrasts the broader situation in the city and nation, decreasing slightly to 9.9 per cent in the third quarter, and stabilizing the runaway rise in vacancy rate.

Still, this number sits well above the 1.1 per cent vacancy rate seen in the last quarter of 2019, before the world as we knew it changed.

Slow growth in leasing activity is fueling a recovery in leasing rates, but it could be a while before Toronto returns to the pre-pandemic scenes of bustling traffic, suits with briefcases, and a PATH system that people actually use.

It could always be worse, though: Out in Calgary, the downtown office vacancy rate has reached a staggering 32.9 per cent.