Competition Act Amendments And Universities/Colleges Retail Leases

Overview

• Amendments to the Competition Act came into effect on December 15, 2024.
• These changes affect exclusivity clauses and restrictive covenants in commercial leases across Canada, including leases entered into by universities and colleges with retail, food service, and other commercial operators.
• The Competition Bureau released updated Anti-Competitive Conduct and Agreements Enforcement Guidelines on October 31, 2025.

Key Concepts

• Exclusivity Clause: Prevents a landlord from leasing to competing businesses (e.g., only one pharmacy, coffee shop, or food vendor on campus).
• Restrictive Covenant: Restricts competition on the land (not commonly encountered in university and college leasing).

What’s New

1. Broader Oversight
   • Bureau can now review landlord-tenant agreements, not just agreements between competitors.

1. A lease may be scrutinized where it has the purpose or effect of substantially preventing or lessening competition.

2. Easier to Trigger “Abuse of Dominance”
   • Intent OR effect may be enough for enforcement (previously, both needed).
   • Applies where a party has significant market power.
   • The relevant market may be highly localized. A university or college may not be dominant within a city, but may hold significant market power within a campus environment where retail opportunities are limited.

Implications for Universities and Colleges

• Campus exclusivity clauses may now attract greater scrutiny.
• No “grandfathering” – older (currently binding) exclusives can still be challenged.
• Certain exclusives may still be justified, but only in limited circumstances – where they are necessary to encourage investment, facilitate market entry, or support legitimate operational efficiencies.

Enforcement Trends

• Major retailers (e.g., Empire/Sobeys, Loblaw, Walmart) have agreed to remove or limit exclusives due to Bureau pressure.
• Private parties (landlords, tenants, etc.) can now challenge anti-competitive clauses before the Tribunal.
• The Bureau has confirmed that negotiated resolutions may result in formal consent agreements, which are registered with the Tribunal and have the same force and effect as a Tribunal order.
• Remedies can include: orders to remove clauses, amend leases, financial penalties.

What University and College Landlords Should Do

• Review existing leases with exclusivity provisions.
• Assess whether exclusives are necessary and proportionate.
• Determine whether the original business justification still exists.
• Amend overly broad clauses where appropriate.
• Future leases: avoid exclusives where possible; if used, ensure they are narrow and justifiable.

General Best Practices

• Limit exclusives by time, scope, geography, and product/service.
• Focus only on direct competitors.
• Consider whether a less restrictive alternative is available.
• Review enforcement provisions and consider language confirming that the landlord is not required to enforce an exclusivity provision where doing so would contravene the Competition Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.