Canada Competition Bureau urges provinces to curb non-compete use
Canada's competition watchdog is pressing provincial and territorial governments to tighten limits on non-compete agreements as part of a broader push to improve labour mobility. The call comes as officials argue that widespread use of the clauses can hold back wage growth, entrepreneurship and hiring across the economy.
Highlights
- Canada Competition Bureau Interim Commissioner Jeanne Pratt urges provinces and territories to limit non-compete agreements to foster more competitive labour markets.
- OECD surveys cited by the Bureau show widespread, increasing use of non-competes in Canada, often beyond roles with legitimate business justification.
- Ontario and the federal government have restricted non-compete agreements; the Bureau encourages other regions to reform laws to enhance labour mobility and economic growth.
Open letter pushes labour law reform
As reported by Government of Canada, citing the Competition Bureau, Interim Commissioner of Competition Jeanne Pratt urges provincial and territorial ministers in an open letter published today to foster more competitive labour markets by limiting the use of non-compete agreements.Non-compete agreements restrict workers from joining a competing employer or starting a competing business for a period after leaving a job, typically to protect sensitive information or customer relationships. The Bureau says OECD surveys of workers and firms in Canada show these clauses are widespread, increasingly used and often applied beyond roles where they are most justified.
The agency says non-competes cover a broad range of workers, including people on fixed-term contracts, in lower-paying jobs and in roles without access to confidential information. It adds that the clauses are often unenforceable under the law but can still discourage workers from seeking better-paying jobs or launching their own businesses.
Broader economic and regional implications
The Bureau frames labour mobility as an important driver of competition and economic growth, saying a worker's ability to change jobs or start a business supports better pay, improved working conditions and broader talent pools.Ontario and the federal government have already moved to restrict non-compete agreements. The Bureau is now encouraging other provinces and territories to build on that momentum by reforming their own labour and employment laws.
In our earlier article on the benefits of early-career job-hopping, we looked at economic research showing that changing jobs can be a major driver of wage growth and better long-term job matches. The piece highlighted findings that frequent moves early in a career account for a significant share of lifetime earnings gains, challenging the idea that short tenures are necessarily a negative signal.
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