Kinew suggests ‘real competition’ coming to Manitoba grocery sector as deadline passes | CBC News
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Six months after passing a law aimed at making it easier for new grocery stores to open, Manitoba’s premier says lower grocery bills could be on the horizon.
“We could be the first province in Canada that actually has real competition in the grocery sector and people don’t even know,” Premier Wab Kinew said Friday.
A law given royal assent in the province this June bans new real estate deals signed by grocery stores and supermarkets that prevent similar stores from opening nearby.
The targeted property controls — known as restrictive covenants and exclusivity clauses — are common across Canada and raise “serious competition concerns” by their nature, according to guidance from the Competition Bureau of Canada.
Existing deals can continue if they were registered with the province within 180 days from the law’s passing. The province said 46 were registered by Monday’s deadline, with 20 others abandoned by the grocers.
But the province may challenge the registration and refer the matter for a hearing to the Municipal Board if they find the deal is against the public interest.
Manitoba Premier Wab Kinew says he’s instructed his public service delivery minister to challenge each of the restrictive covenants that prevent grocery stores from opening near an existing store. The province recently passed a law that allows existing property control rules to be referred to the municipal board if they’re contrary to the public interest.
Kinew said during question period Thursday the government intends to challenge all 46 of the remaining agreements.
It “might be a couple years … [from] when the bill was passed to when these covenants get struck down,” Kinew said.
“But at the end of the day, if we’re changing the whole structure of the economy in Manitoba to benefit you, the average person out there, I think that’s well, well worth it.”
But one food economist isn’t convinced the change will make a substantive impact on affordability.
Law ‘good optics,’ but won’t lower prices: professor
Mike von Massow, professor at the University of Guelph’s department of food, agricultural and resource economics, said big box stores generally avoid being close to one another, and that these types of property controls usually apply to a small area.
“Restrictive covenants aren’t stopping big stores from going next to each other. [It’s] the infrastructure, the building space that we have,” he said.
The professor said the law may allow independent grocers and other small-footprint retailers like Dollarama to set up shop in some areas, but that he doesn’t expect any impact on food prices.
The deals are “largely about restricting those smaller competitors,” von Massow said. “And really only a small number of [them] will actually be price-competitive.”
The Competition Bureau’s guidance said that property controls may actually increase competition in some circumstances, including by encouraging companies to enter a market.
Von Massow said the deals may, for example, entice stores to comes to smaller communities where there are fewer people who can buy their goods, by assuring them they won’t have to compete with a business setting up right next door.
He said the law is “good optics.”
“Affordability is a huge issue for all governments and everybody’s looking for an easy answer to the reason food prices are going so high. And there isn’t an easy answer,” he said.
“I appreciate that they’re trying to do things.… But frankly, there’s not a lot they can do without sending food-insecure individuals direct cheques.”
Kinew said the law may “not be a silver bullet” but it’s one more thing the government can do to push for affordability.
