Competition Bureau Issues Final Guidelines on Real Estate Property Controls

On June 4, 2025, the Competition Bureau (Bureau) issued final guidelines setting out how it will apply the Competition Act (Act) to property controls, i.e., exclusivity clauses in leases and restrictive covenants on real estate. These guidelines follow the Bureau’s draft guidelines and related public consultations. While the guidelines are not law, they indicate how the Bureau will approach property controls.

Overview of the Guidelines

The guidelines follow changes to the Act’s civil competitor collaboration provision to include agreements that are not between competitors (e.g., vertical agreements between landlords and tenants) if a significant purpose of all or part of the agreement is to prevent or lessen competition.

The guidelines focus on two types of property controls:

1. Exclusivity clauses: clauses in commercial leases limiting the extent to which the property can be used by a tenant’s competitor (e.g., a retail lease stipulating that the landlord cannot lease space in the same plaza to a competing retailer).
2. Restrictive covenants: restrictions attached to land that prevent purchasers or owners of commercial property from certain uses, such as the operation of businesses that compete with a previous owner.

The Bureau takes a skeptical view of property controls, stating that “the value of a competitor property control comes from how it can protect the business from competition.” However, the Bureau recognizes that property controls may be pro-competitive, for example, by incentivizing a retailer to make investments in the property that it would not otherwise make. Whether a property control has an anti-competitive purpose is central to the legal assessments under the civil collaborations and abuse of dominance provisions in the Act. For a property control to be captured by the civil collaborations provision, however, the Bureau concedes that the conduct must also be likely to prevent or lessen competition.

The Bureau considers exclusivity clauses to be justified “in limited circumstances,” such as where a landlord would not otherwise be able to attract that type of tenant, while it views restrictive covenants as justifiable only in “exceptional circumstances.” In assessing whether a property control is justified, the Bureau will focus on three key factors:

• Timeframe: Does the property control only last as long as is necessary to incentivize entry or investment?
• Geographic area: Does the property control cover the smallest geographic area necessary? For example, the Bureau views property controls that restrict competitors’ ability to lease at other properties as generally unjustified.
• Products and services: Does the property control unnecessarily limit the products or services that a competitor can offer?

Under the abuse of dominance provision, a property control may be prohibited where it has an anti-competitive purpose, while other remedies, including corrective orders or substantial administrative monetary penalties (AMPs), may be ordered where the property control prevents or lessens competition substantially. Under the civil collaboration provision, a prohibition order, corrective orders and AMPs may be ordered where a property control is likely to prevent or lessen competition substantially.

Key Takeaways 

• Whether a property control — regardless of whether it has an anti-competitive purpose — is likely to prevent or lessen competition substantially will be an important consideration. The competition law assessment is therefore highly fact dependent, and parties that may have market power should exercise caution.
• The Bureau recognizes that property controls can be pro-competitive (e.g., to incentivize entry or investment) and parties should clearly document any such pro-competitive rationales.
• Businesses should consider that private parties can bring applications in respect of abuse of dominance and, starting June 20, 2025, civil collaborations with leave of the Competition Tribunal. Private applicants may make arguments that deviate from the Bureau’s guidelines, although the Bureau’s view is likely to be considered by the Tribunal.

For more information on the guidelines, please contact any member of our Competition & Antitrust group.