The Competition Bureau of Canada is calling on retailers and landlords to drop or revise property controls in commercial leases that cannot be justified, even if they do not violate the Competition Act.

These restrictions are often found in mall leases or tied to a property after a tenant vacates.

In newly issued guidance, the federal agency advised that such controls—like clauses limiting what kinds of stores can operate in a location—should only be used when they promote competition. And even then, they should only be used in exceptional cases.

“The widespread use of competitor property controls can make it more difficult for firms to enter new markets or expand, reducing the choices available to Canadians,” states the bureau in the new guidelines.

The move follows the bureau’s 2023 grocery market study and a recent agreement with Empire Company, the parent of Sobeys and other leading supermarket chains, to eliminate a clause restricting grocery competition in Crowsnest Pass, Alta.