Bureau says several million Canadian workers may be bound by clauses that curb job mobility
Canada’s competition watchdog is urging provinces and territories to restrict non-compete agreements, warning that the clauses curb wages and job mobility even when courts would not enforce them.
In an open letter, Jeanne Pratt, interim commissioner of competition at the Competition Bureau in Gatineau, Que., asked ministers responsible for labour and employment standards in 12 provinces and territories to follow Ontario and Ottawa in limiting the clauses.
“To succeed in a changing economy, Canada needs workers and businesses that can adapt and grow,” Pratt said in a statement. “I encourage governments to remove unnecessary barriers to labour mobility, so that workers can find better jobs, businesses can expand and innovation can thrive.”
How widespread are non-compete agreements?
Those barriers are common. Drawing on 2025 surveys commissioned by the Organisation for Economic Co-operation and Development (OECD), the bureau said Canadian employers estimate that 29% to 39% of private-sector staff are covered. Among workers, 20% say they definitely have one and 21% think they probably do. Across more than 13.7 million private-sector workers, that suggests several million Canadians may be bound.
Nor are the clauses confined to the executive suite. The OECD data show coverage of 15% to 26% of employees earning under $3,000 a month and 13% to 25% of workers with no access to confidential information. Among firms that use non-competes, 30% apply them to every employee – a breadth Pratt called “concerning.”
The effects are measurable, too. About 23% of covered workers told the OECD a non-compete had stopped them from changing jobs, and 12% said it had kept them from starting a business.
Why court review falls short
That impact persists even though Canadian courts already presume most of these clauses invalid. In Shafron v. KRG Insurance Brokers (Western) Inc., the Supreme Court of Canada held that “a restrictive covenant is prima facie unenforceable unless it is shown to be reasonable.”
Legal weakness does not translate into worker confidence, the bureau argues. Among surveyed workers whose clause likely would not survive a challenge, 44% said they would still decline a competing offer, and 27% said they had already been blocked from moving.
The letter also cites a warning from the Alberta Court of Queen’s Bench in The Travel Company Ltd v. Keeling that an unreasonable covenant “may be little more than a mechanism by which an employer intimidates and controls.”
Jon Pinkus, an employment lawyer and partner at Samfiru Tumarkin in Toronto, told Global News the clauses were designed for senior executives and that many are not enforceable.
What employers should know
Ontario barred most new non-competes in 2021 through its Working for Workers Act provisions that ban non-compete agreements. That followed debate over whether non-compete clauses should be banned outright. Ottawa’s Bill C-31 would extend similar limits to federally regulated workplaces by amending the Canada Labour Code.
Elsewhere, the letter is a policy recommendation with no legal force. Joshua Chad and Paul Boshyk, lawyers at McMillan LLP in Toronto, wrote in a Nov. 4, 2026 bulletin that it fits a pattern of growing bureau advocacy, with 16 submissions in 2026 as of Oct. 31, up from six in 2025. They added that the underlying OECD report suggests Canada’s usage is broadly in line with other advanced economies.
The firm advised employers to review existing non-compete arrangements now. Non-solicitation and confidentiality clauses remain the usual alternatives, although recent rulings show courts closely examine when non-competes add up to non-solicits.
