Competition Bureau urges provinces to limit non-compete clauses

Canada’s Competition Bureau is urging provincial and territorial governments to limit the widespread use of non-compete clauses in employment agreements.

In an open letter published Thursday, Interim Commissioner of Competition Jeanne Pratt argued that broad restrictions can reduce workers’ mobility, wages and bargaining power while making it harder for businesses to hire and for new firms to form.

The bureau cited OECD employer estimates suggesting that 29 to 39 per cent of Canadian private-sector employees are covered by a non-compete agreement. A separate worker survey found 20 per cent of respondents were certain they had one and another 21 per cent believed they probably did.

Ontario has prohibited most new non-compete agreements since 2021, with exceptions. The federal government has also proposed limits for federally regulated workers in Bill C-31. The bureau’s letter is a policy recommendation, not a change to provincial law.

Sources: Competition Bureau Canada, news release and open letter, both published October 29, 2026.

Illustrative stock photo by Sebastian Herrmann via Unsplash.