Kinew suggests 'real competition' coming to Manitoba grocery sector as deadline passes

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, while 20 others that could have been registered were abandoned by grocers.

But the new law permits the province to challenge any of the registered deals and refer the matter for a hearing to the Municipal Board if they find the deal is against 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 Friday.

"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 new law will make a substantive impact on affordability.

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."