The municipality of Crowsnest Pass, in the Rocky Mountains of Alberta, has a population of about 5,700, is home to parts of two provincial parks and has tourist attractions such as underground tours of closed mines. 

It offers fishing, hiking and mountain-biking trails in the warmer months, snowmobiling, cross-country and downhill skiing in the colder months. 

What it doesn’t have is a plethora of grocery stores. A single IGA store is located in the northwest section of Blairmore, one of multiple smaller towns, along with Bellevue, Frank and Coleman, that were amalgamated into the municipality. 

The lone grocery store isn’t an accident. The IGA store is part of the Empire chain, the parent company of Sobeys, and the lease for that store had an exclusive or restrictive covenant that allowed it to prevent other grocery stores from entering the market. 

A recent Empire decision to remove that covenant was a victory of sorts for Competition Bureau efforts to improve competition in the retail sector by challenging commercial lease restrictions. 

The Bureau’s news release earlier this year noted the restriction “ensured that it would continue to be the only grocery store in the area.” Its investigation and Empire’s actions “mean that a new grocery store competitor can move forward with plans to open a second store in Crowsnest Pass in 2025.”

Having more competition in Crowsnest Pass “helps make groceries more affordable and increases product options for residents,” the Bureau said.

The Bureau said it is continuing to investigate the use of property controls by Sobeys and Loblaw parent companies, which together operate 4,000 stores across the country.

But is the Crowsnest Pass announcement a ‘warning’ to other grocers to voluntarily drop similar restrictions, or that the Bureau is going to pursue similar investigations that may lead to potential penalties?  

Will the focus remain on rural regions or move to more urban ones? And will the Bureau launch similar property control investigations for other types of businesses?

For now, the Bureau is asking grocers to look inward.

“Market forces – not property controls – should determine whether and where new grocery stores can open in communities across Canada,” said Matthew Boswell, the Commissioner of Competition, in the press release. 

“We encourage all businesses that use property controls to review them and ensure that they comply with the law.”

In recent months, leadership from both Walmart and Loblaw have indicated some willingness to cede lease-based property controls. Earlier this year, Manitoba introduced legislation to ban these types of lease restrictions.