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- calendar_today October 30, 2026
Competition Bureau Urges Restrictions on Non-Compete Clauses
The Competition Bureau of Canada is encouraging provincial and territorial governments to place limits on the broad use of non-compete clauses within employment agreements. This recommendation comes amidst concerns that such restrictions can negatively impact the labour market and business competition across the country.
Potential Effects on Employee Mobility and Wages
Jeanne Pratt, Interim Commissioner of Competition, outlined in an open letter published Thursday that imposing wide-ranging non-compete clauses can hinder employee mobility, limit worker wages, and reduce overall bargaining power. The Bureau argues that when workers face strict non-compete agreements, it becomes harder for them to move between jobs, negotiate better pay, or pursue new opportunities.
Impact on Business Competition and Market Dynamics
The Competition Bureau also raised concerns about the broader impact on business competition. The organization suggests that non-compete clauses make it more difficult for businesses to hire the talent they need and may discourage the formation of new companies, ultimately discouraging innovation within the labour market.
Prevalence of Non-Compete Clauses in Canada
According to OECD employer estimates cited by the Competition Bureau, between 29 and 39 per cent of Canadian private-sector employees are currently subject to a non-compete agreement. Additionally, a worker survey found that 20 per cent of respondents knew for certain they were covered by such a clause, with another 21 per cent believing they probably were. These figures highlight the significant presence of non-compete clauses in Canadian employment agreements.
Examples of Provincial and Federal Actions
Ontario has already taken steps to address this issue, having prohibited most new non-compete agreements since 2021, with some exceptions. On the federal level, proposed Bill C-31 aims to introduce similar limits for federally regulated workers. The Bureau's recommendation, however, is a call for further action specifically at the provincial and territorial levels, as regulation of these agreements largely falls within their jurisdiction.
Recommendations and Next Steps
The Competition Bureau's open letter and related news release do not constitute a legal change but represent a formal policy recommendation. The Bureau urges provinces and territories to review and consider province regulation to limit the impact of non-compete clauses while supporting business competition and worker flexibility.
Sources: Competition Bureau Canada, open letter and news release published October 29, 2026.
Source: westislandblog.com.
