The Competition Bureau is calling on provinces and territories to introduce legislation restricting the use of non-compete agreements in employment contracts.
In a letter dated Oct. 29 to the labour ministers of 12 provinces and territories, interim commissioner Jeanne Pratt said non-competes are unusually prevalent in Canada and their overuse is harming workers and the economy by reducing wages and job mobility, and discouraging entrepreneurship.
“This breadth of use is concerning,” wrote Pratt.
An Organisation for Economic Co-operation and Development survey of employers and employees conducted in 2025 found that as many as 39 percent of private-sector employees are covered by a non-compete agreement, making Canada one of the highest-prevalence countries surveyed.
The report estimated that several million Canadians may be bound by non-competes, including 13 percent to 25 percent of workers with no access to confidential information and 15 percent to 26 percent of low-wage workers earning less than $3,000 per month.
Among Canadian firms using non-competes, 30 percent apply them to every employee, regardless of their role or seniority, the bureau noted.
“Ontario already prohibits most non-competes, subject to defined exceptions, and the federal government has proposed similar limits in federally regulated workplaces. The Competition Bureau encourages other provincial and territorial governments to consider taking similar action,” Pratt wrote.
Ontario was not included in the letter because it banned the use of non-competes in employment contracts in December 2021, except for very senior executives or in certain circumstances where a business is sold.
At the federal level, changes to the Canada Labour Code were proposed in May 2026 through the tabling of Bill C-31, which would ban non-competes in federally regulated workplaces, other than in exceptional circumstances. The bill is still making its way through Parliament.
According to the OECD, 23 percent of Canadian workers who report having a non-compete agreement say it has prevented them from changing jobs. Approximately 12 percent self reported that the agreement prevented them from starting a business.
In the letter, Pratt noted that given the widespread use of non-competes, even modest effects on employee behaviour could result in the loss of a substantial number of job and entrepreneurship opportunities.
“Greater clarity and consistency in employment protections would make the rules more transparent for workers, facilitate compliance by employers and extend the benefits of pro-competitive reform across Canada,” she said.
Non-compete clauses can restrict workers from joining a rival company or starting a competing business for a set period of time after leaving a job.
Jon Pinkus, an employment lawyer and partner at Samfiru Tumarkin LLP in Toronto, told Global News the clauses should only be used for employees who have a “real fiduciary duty” and who “can do real damage if they go to a competitor.”
Despite the prevalence of non-compete agreements, Pinkus said many of them are not enforceable.
“The courts may determine that they are an unreasonable, what we call restraint of trade, and invalidate them on that basis,” he said, adding that the responsibility is on the employer to prove a non-compete is necessary.
But more than 40 percent of employees operating under a non-compete said they would turn down a competing job even if the agreement was unlikely to be upheld in court, according to the OECD.
The Government of Canada committed in its 2025 budget to restricting the use of non-compete agreements which it said will “protect workers’ rights, promote labour mobility, strengthen competition, and empower workers to move to a higher-paying job or start their own business.”
This story was written by the e2gold.ca newsroom from reporting by The Globe and Mail and Global News. Quotes are checked word for word against that reporting.