Is Loblaw Blocking a New Grocery Store in Your Neighbourhood?

The story we tell ourselves about capitalism is that it’s a free market system in which firms slug it out for the privilege to sell us an apple or a mid-sized sport utility vehicle. Doesn’t it sound nice? In this fairy tale, competition is the stuff of magic. It has a disciplining function, keeping the sellers sleek, honest, and incentivized to innovate. Prices go down, quality goes up. Everybody wins.

• Companies throughout Canada use property controls to keep competing businesses from certain locations
• By exercising this control, dominant firms shape both markets and the physical landscape
• Politicians are finally waking up to the costs of corporate gatekeeping

In practice, capitalists hate competition. It’s too hard. For big companies, half of the job is limiting those who might compete, often through buying them out or finding ways to keep them from doing business. The easiest rival to beat is the one that never gets the chance to open its doors—or doesn’t keep them open for long.

To their discredit, governments, particularly in Canada, have historically been lousy at inducing market competition or preventing corporations from building oligopolies and monopolies. While Parliament updated the Competition Act in 2024, granting the Competition Bureau expanded powers that came into force in 2025, the pro-competition body has never successfully blocked a merger. Indeed, before recent changes to the act, the law allowed mergers to more or less produce market monopolies. The upshot for consumers is that we face higher prices, fewer choices, and a more displeasurable retail experience.

One of the most insidious anti-competitive tools is the property control clause. It’s a common barrier to competition used by companies throughout the country, especially grocery store chains, including Loblaw, everyone’s favourite everything company.

According to the Competition Bureau, property controls take the form of either exclusivity clauses or restrictive covenants, which have slightly different meanings in the law, but which amount to the same thing: they prohibit businesses from opening a shop at a competitor’s current or previous location.

A grocery chain might use property controls to insist that, as a condition of its role as an anchor tenant in a plaza, no other grocers may open nearby. But they might also limit other businesses unrelated to their core trade, such as dentists, bowling alleys, or arcades. After all, why should consumers be permitted to roll a turkey and then buy a chicken? More seriously, these clauses are about monopolizing destinations, not products. The less reason consumers have to visit competing centres—where they might spend money—the more valuable an anchor business’s location becomes.

If anti-competitive uses of restrictive clauses sound unreasonable, even rage inducing, the details of their use are worse still. Jacob Filipp, a marketing operations professional, maintains a personal website that tracks restrictive grocery covenants across Canada. Retailers on the list include Loblaw, Shoppers Drug Mart, Sobeys, and Save-On-Foods.

As Filipp’s database shows, covenant terms can limit competitors or otherwise unwanted tenants from operating within a radius of an anchor business, in some cases for decades. One example includes a Sobeys contract in Edmonton that blocks other grocers for sixty years. Another includes a Shoppers Drug Mart in Caledon, Ontario, that limits “nineteen different types of businesses” for half a century.

Some radius restrictions can run to kilometres, including a five-kilometre restriction in Halifax established between Loblaws and Choice Properties real estate investment trust that limits grocery competition. Both Loblaws and Choice Properties are majority owned by the George Weston Ltd. holding company. Nice work if you can get it.

None of this is accidental. Property controls aren’t the unfortunate side effect of poorly written laws. They’re not loopholes. Like the xenomorph from Alien, these terms are the market system in its most actualized, state-supported, and ruthless expression: relentlessly expansionist, incapable of coexisting with anything that might compete for space.

Property controls are common in real estate contracts in Canada and include a range of prohibitions and injunctions. Their history is, to say the least, fraught and discriminatory.

While a contemporary covenant might be used to prevent the sorts of renovations you might make to a heritage home or limit the number of tenants who may live in an apartment, in the past, such clauses were used to bar religious and racialized minorities from property ownership. The legacy of this bigoted use of the clause remains with us today, shaping neighbourhoods and wealth distribution.

As Canadians continue to face an affordability crisis and grocery chains take heat for inflated food costs, price fixing, and product mislabelling scandals, politicians are beginning to notice the problems property controls pose to market competition. In Manitoba, Premier Wab Kinew’s government is doing what no other province or territory has done: it’s pushing back on such clauses to boost competition among grocers.

Last summer, the province passed the Property Controls for Grocery Stores and Supermarkets Act, banning new property restrictions that stifle grocery competition. In April, Manitoba announced it was also going after forty-three contracts that predate the law, saying it “intends to bring a case against each one.” The first seven challenges are underway.

Similar efforts are afoot elsewhere. The City of Edmonton is lobbying the province of Alberta to end restrictive covenants and exclusivity controls for grocery stores. Last January, Empire Company Limited, which owns Sobeys, agreed to remove property controls restricting retail competition in Crowsnest Pass after an investigation by the Competition Bureau. In Halifax, Loblaw has said it asks its commercial landlords not to enforce property restrictions, though it’s unclear how anybody would know if they did.

If property controls are anti-competitive, which they are, and bad for consumer choice and prices, which they are, why aren’t more cities and provinces moving against them? And why has it taken so long? Why aren’t more Canadians up in arms?

Vass Bednar, who helps run the Canadian Shield Institute, a think tank focused on economic policy and sovereignty, blames a lack of awareness. “We tolerate the covenants because we don’t know about them,” she says. “It’s a commercial element that’s pretty invisible.”

That invisibility is partly a product of how large grocery chains have extended their reach beyond retail and into real estate. By controlling both the stores and the land beneath them, companies can exert influence within and beyond their primary market. This arrangement allows firms that house multiple enterprises under one corporate structure to shape both the market and the physical landscape. A grocery chain linked to a company that owns real estate can function, de facto, as a single body—simultaneously tenant and landlord, dictating to itself and to rivals who or what gets to occupy the land.

Keldon Bester, executive director of the Canadian Anti-Monopoly Project, a think tank concerned with promoting market competition, agrees that the problem is, in part, ignorance—but he also emphasizes the dynamic has also become all too familiar to industry players. “This really is the wallpaper,” he says. “Restrictive covenants are absolutely bread and butter contractual terms across the commercial real estate landscape. So, on the one hand, you say ‘Well maybe people just don’t know about them,’ and I think there’s something there, but the other side of it is they’re so commonplace that I think many people just consider them the cost of doing business.”

Bester says this dynamic reflects a broader problem in the Canadian market. Businesses prefer not to compete, and neither governments nor consumers take competition particularly seriously—or else the public assumes it is somehow happening anyway.

That complacency often comes wrapped in the language of inevitability. Defenders of the status quo point to geography, scale, and the costs of entering markets dominated by established players. Canada is simply too vast, we are told, to support more than a handful of telecom companies or grocery chains. Governments accept the premise, allowing behemoths to crowd out rivals. Consumers adapt. Concentration becomes so familiar it fades into the background—the cosmic background noise of economic life.

The consequence, says Bester, is a business culture that prizes insulation over competition. “We want to set up these little gardens”—that is, fenced off, protected patches upon which no one may trod.

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Expanding or ripping up these “little gardens” will take government action, likely with pressure from people who’ve had enough with the corporate consumer oligopoly and monopoly players that dominate the country.

That moment can’t come soon enough. Canadians have struggled with soft or declining purchasing power for years, which means we’re getting less and it’s costing us more. When an anti-competitive economy coincides with a major global upheaval, like a pandemic, Russia’s full-scale invasion of Ukraine, or Donald Trump’s war with Iran, the tough going gets tougher. This means less food on the table, gas tanks that don’t get filled, and hopes dashed upon the rocks of circumstances out of our individual control. Home ownership, already a long shot for millions, becomes less likely. Credit card debt grows. Quality of life drops.

There are policy levers to pull, as Manitoba has shown, if there’s will to pull them. Bednar notes the solutions need not be complicated. “Can the state compel private commercial landlords not to discriminate against their competitors?” she asks. “We have protections for renters around discrimination, and maybe that’s what a policy approach to restrictive covenants needs to get us to.”

We may be reaching a tipping point on the matter, tilting toward more of our leaders doing something about anti-competitive real estate restrictions, but even then, the policy response might get messy. Last year, the Competition Bureau offered guidance that discouraged property controls except for instances in which they supported competition, “such as where they protect incentives for a retailer to make investments in order to enter a market.” The bureau gives the example of “a limited exclusivity clause” to incentivize investment in a shopping plaza if “no retailer would otherwise . . . become a key tenant.”

The word “limited” is important. The bureau notes that investment can itself become an anti-competitive weapon. Exclusivity clauses may be framed as incentives to build and expand, but in practice, they often help powerful firms fortify their position, turning financial clout into a moat that keeps challengers, large and small, across industries, at bay. In a country in which investment capital and corporate productivity are sluggish, governments are always scrambling to breathe a little life into the marketplace, just as companies are always too ready to use the threat of capital flight to get their way.

What we have here is a story of power. Large firms who face little market competition and who own both retail and real estate outfits, as Loblaw owner George Weston Ltd. does, are in a position to shape the consumer world in their image. The use of property controls to restrict competition points to a bigger trend: companies amassing dominance in local markets by scooping up competitors and extending their reach across every stage of production, distribution, and sale—from factory floor to checkout counter.

While governments across Canada should restrict the use of property controls in commercial real estate, that reform can only be a first step. We need a broader agenda aimed at restoring competition and rebalancing power—not only among firms, but between corporations and consumers who struggle to make ends meet and keep their pantries stocked.