Federal investigation probes grocery store competition in Halifax

As she picked come out meat specials, Amy Crossley checkered her lean and thought nigh parents with loretta young children to feed.

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

Crossley was shopping at Gateway Meat Market, an independent store in Dartmouth, N.S., that’s known for specials that draw people from around the province. Fans often beg the store to set up more locations. 

"I would like to see more stores like this that are family-run, cheaper for people to come to," Crossley said. 

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

The competition bureau is looking into the use of documents by Sobeys and Loblaw called property controls. These are legal instruments that can block competitors from setting up stores on certain properties.

While the agency is mainly focused on the Halifax area, it’s also looking into the use of property controls throughout Canada. 

The ongoing investigation hasn’t made any conclusion of wrongdoing. But it’s seen some twists.

That includes Sobeys’ parent company trying to stop the investigation, and an announcement in February by Superstore’s parent that it will get rid of property controls from its stores in HRM. 

The competition bureau says the problem with property controls is the effect on smaller competitors. 

“That is something that can really be a major barrier to entry and expansion in the Canadian marketplace,” Anthony Durocher, a deputy commissioner at the bureau told a parliamentary committee in February 2024. 

“You can't start a new grocery store if you can't get access to the land,” he said. “That is something that we heard particularly from independents as being problematic.” 

Some in the grocery industry say getting rid of property controls won’t necessarily make groceries cheaper. Durocher said generally the bureau 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 leads to innovation.” 

Gateway Meat Market has not had to contend with property controls, but co-founder Tamara McKay says when the store set up in 2007 they considered spots in Lower Sackville and Halifax’s north end before settling in Dartmouth. 

Location is one of the challenges when setting up as an independent. 

“It would definitely require a good chunk of property, somebody with the knowledge of a grocery business and being able to foresee the growth,” she said. “When we opened up here, we were a tiny, tiny little store.”

McKay doesn’t foresee Gateway opening a second location, as she’s wary of stretching her business too thin.

“We love what we have here and this is our passion,” she said. 

James Baxter is an associate professor at Dalhousie University’s Schulich School of Law, who studies property law and food systems. 

He said there are a limited number of commercial spaces in a city that can hold a grocery store. The sites tend to be large and need investment.

“At the end of the day, [property controls] limit the sort of supply of sites or available areas where, for example, you could open up a grocery store in the neighborhood,” he said. 

The competition bureau is investigating two different types of controls in HRM: restrictive covenants and exclusivity clauses. 

A restrictive covenant is attached to the land itself. A grocery chain can place a covenant on a piece of property it’s 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 covenants have drawn more attention because they last longer, but said exclusivity clauses can also last for years. 

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

However, Sands disagrees with the idea that eliminating property controls will bring down high food prices, as he says that’s caused by global factors affecting food supply. 

“It’s not so much about prices as it is about the availability of food to people in Canada, to be able to have options,” Sands said. 

In documents filed in Federal Court, Competition Bureau Canada says it’s focusing on Sobeys and Loblaws (Atlantic Superstore) because they have “collective market shares” between 46 and 70 per cent in Canada. 

In June 2024, the bureau got court orders saying the grocers’ parent companies, Empire and George Weston, had to disclose information about property control documents, leases, development plans, and store improvements.

The order also included data about customer behaviour. 

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

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

They called the inquiry a “fishing expedition that will result in significant and disproportionate burden to Empire,” and said it might be politically motivated by comments by the federal industry minister about the grocery sector. 

The letter said the bureau hasn’t disclosed any “meaningful basis” to focus on Halifax, and the “burdensome questions” about HRM should be removed. 

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

Sobeys did not respond to a request for comment. 

A competition bureau spokesperson would not give details about why HRM was chosen out of all of Canada.  

There’s no easy way to find property controls in Nova Scotia except by doing an address-by-address search of property records.

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

“The public at least doesn't have a very good view of where these things might exist within the bounds of a city, to try to understand the nature of the problem, the range of its effects and some of the solutions,” he said.  

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

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

Some of these leases spelled out restrictions on renting to other dealers in “meats, fruits, vegetables, fish, seafood, poultry, bakery, dairy, or delicatessen products.” 

At the Superstore at Dartmouth’s Braemar Drive, the language simply restricted a “supermarket business” at any of the landlord’s properties within two kilometres while Loblaw is still operating its store. Similar language was used for the lease at the Sobeys on Sackville Drive. 

In its February announcement, Loblaw said that it would stop placing restrictive covenants on 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 impacts elsewhere in Canada. 

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

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

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

People who live nearby, like Susan McEachern and Grant MacDonald, still miss the Sobeys location.

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

As of late October 2025, a large part of the building didn’t appear to be an operating business.

“It's discouraging,” MacDonald said of the closed storefront, adding that the property has had trouble with people dumping garbage there. 

MacDonald said he didn’t think an independent food store was likely to move in, but McEachern thinks if one did open, people in the neighbourhood would use it. 

The competition bureau recommended in 2023 that provinces and territories should take steps to limit or ban property controls in the grocery industry, but only Manitoba has done so to date. 

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