Federal investigation examining grocery store competition in Halifax

As she selected the specialty meats, Amy Crossley checked off her list and thought about parents who have young children.

“The grocery bill is really high,” she said. “There’s only two of us now; my kids are grown and gone. And, even for us, I’m spending $500 a month if I go to a regular store.”

Crossley was shopping at Gateway Meat Market, an independent store in Dartmouth, N.S., known for specialty dishes that draw people from across the province. Fans often urge the store to set up more locations.

“I would like to see more stores like this that are family-run and affordable for people,” Crossley said.

Since last year, an investigation into the potential for new grocers to set up in the Halifax Regional Municipality has been quietly underway under the Competition Bureau of Canada.

The Competition Bureau is investigating Sobeys and Loblaw’s use of what it calls asset controls. These are legal devices that can prevent competitors from setting up stores on certain properties.

While the agency focuses primarily on the Halifax area, it is also looking into the use of asset controls across Canada.

The ongoing investigation has yielded no findings of wrongdoing. But some twists have been seen in it.

This includes an attempt by Sobeys’ parent company to block the investigation and an announcement by the superstore’s parent company in February that it would relinquish asset control of its stores to HRM.

However, an investigation by CBC found that property control documents are still attached to several grocery store properties in the Halifax area.

access to land

The Competition Bureau says the problem with asset controls is the impact on smaller competitors.

“This is something that could really be a major barrier to entry and expansion into the Canadian market,” Anthony Durocher, a deputy commissioner of the bureau, told a parliamentary committee in February 2024.

“You can’t start a new grocery store if you can’t get access to land,” he said. “This is something that we’ve heard from independents in particular as being problematic.”

something in the grocery industry Let’s just say that getting rid of asset controls won’t make groceries cheaper. Durocher said the bureau generally believes more competition would help.

“We think the evidence speaks for itself,” he told the committee. “Competition is good for consumers. It lowers prices and promotes innovation.”

Gateway Meat Market hasn’t had to deal with property controls, but co-founder Tamara Mackey says when the store was founded in 2007 they considered locations in Lower Sackville and the north end of Halifax before settling in Dartmouth.

Location is a challenge when establishing yourself as an independent.

“It will definitely require a good chunk of property, someone with knowledge of the grocery business and someone capable of predicting growth,” he said. “When we opened here, we were a small, tiny shop.”

Mackey doesn’t expect Gateway to open a second location, as he’s wary of shrinking his business too much.

“We love what we have here and it’s our passion,” he said.

Limited commercial space for groceries

James Baxter is an Associate Professor at Dalhousie University’s Schulich School of Law, studying property law and food systems.

He said there are a limited number of commercial spaces in the city that can house a grocery store. Sites are large and require investment.

“At the end of the day, (property control) limits the type of sites or supply of areas that are available, for example, you can open a grocery store in a neighborhood,” he said.

The Competition Bureau is investigating two different types of controls in HRM: Restrictive covenants and exclusivity clauses,

There is a restrictive covenant attached to the land itself. A grocery chain may place a covenant on a piece of property it is selling to prevent the land from being used for a competing supermarket.

An exclusivity clause is attached to a commercial lease, and can be used by a grocery tenant to prevent the landlord from leasing to a competitor in the same plaza or within a certain area.

Baxter believes restrictive contracts have attracted more attention because they last longer, but said exclusivity clauses can also last for years.

Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers, says his organization is pleased to see the focus on property controls.

However, Sands disagrees with the idea that eliminating asset controls will reduce high food prices, as he says this is due to global factors affecting the food supply.

“It’s not so much about price as it is about availability of food, providing options for people in Canada,” Sands said.

What was the Competition Bureau looking for?

In documents filed in Federal Court, the Competition Bureau Canada says it is focusing on Sobeys and Loblaws (Atlantic superstores) because they have a “collective market share” of between 46 and 70 per cent in Canada.

In June 2024, the bureau received a court order requiring the grocers’ parent companies, Empire and George Weston, to disclose information about property control documents, leases, development plans and store improvements.

The orders also included data about customer behavior.

In October, CBC asked whether the bureau had received information from any companies, but a spokesperson declined to answer, saying the organization conducts its work confidentially.

Empire’s objection

Empire challenged the order, and tried to quash the investigation.

In a letter filed with the court, company lawyers objected to the idea that Sobeys has a “dominant” position, writing that “this is clearly not the case in HRM.”

He called the investigation a “fishing expedition” that would result in a significant and disproportionate burden on the kingdom, and said it could be politically motivated. Comments of Federal Industry Minister About grocery sector.

The letter said the Bureau had not disclosed any “meaningful basis” for focusing on Halifax, and that “massive questions” about HRM should be removed.

However, Empire’s legal challenge was rejected by the Federal Court of Appeal and the Federal Court of Appeal.

Sobeys did not respond to a request for comment.

A Competition Bureau spokesperson did not provide details on why HRM was chosen from across Canada.

Examples of asset control in HRM

There is no easy way to find property control in Nova Scotia other than doing an address-by-address search of property records.

“It’s really hard to keep track of them,” Baxter said.

“The public at least doesn’t have a very good view of where these things might exist within a city’s limits to try to understand the nature of the problem, the extent of its impacts, and some of the solutions,” he said.

Atlantic Superstore’s website lists 13 locations in HRM, while Sobeys lists 18 locations. Some other brands include Walmart and Costco.

CBC examined property records of those stores, and found several examples of documents that mentioned restricting the use of the property to sell food.

Some of the documents were contracts placed on land near grocery stores, while five of Sobeys and 10 of Atlantic Superstores had documents related to a lease with a landlord.

Some of these leases prohibit renting to other dealers of “meat, fruits, vegetables, fish, seafood, poultry, bakery, dairy, or gourmet products.”

At Dartmouth’s superstore on Braemar Drive, the language only prohibited “supermarket business” at any property of the landlord within two kilometers, while Loblaw still operated its store. Similar language was used for the lease at the Sobeys on Sackville Drive.

In its February announcement, Loblaw said That it will stop imposing restrictive covenants on the properties it sells and release its interest in any existing covenants.

It also said it would eliminate exclusivity clauses from its store leases in Halifax, and take steps to reduce their impact elsewhere in Canada.

The Competition Bureau told CBC that work has started. It is not clear how much time this will take. It is also not clear from property records whether property controls on some stores have already been lifted or waived.

Loblaw did not respond to a request for comment on the timeline for removing asset controls, but in its announcement of the changes, it wrote: “We welcome competition, which helps deliver value to Canadians.”

Restrictions still in place at former Sobeys location

A 2019 study by Jenna Khouri-Hanna, one of law professor James Baxter’s former students, Former grocery store locations searched for property control,

CBC checked some of those locations to see if property controls had been lifted, but some were still in place. This includes a restrictive covenant on the Dartmouth Sobeys location which closed in 2009 and was sold to a new owner.

Part of the deed, dated in February 2011, stated that the property could not be used for a grocery store for the next 20 years.

People who lived nearby, like Susan McEachern and Grant MacDonald, still remember the Sobeys location.

“It was very helpful,” McEachern said. He said there were protests when the store closed.

As of late October 2025, a large portion of the building appears to no longer be an operating business.

“It’s discouraging,” McDonald said of the closed storefront, adding that the property has been a nuisance due to people throwing trash there.

MacDonald said he doesn’t think any independent food stores are likely to open, but McEachern believes if one does open, people in the neighborhood will use it.

The Competition Bureau recommended in 2023 that provinces and territories should take steps to limit or prohibit asset controls in the grocery industry, but only manitoba did it to date.

More top stories: