Overview
The Manitoba Legislative Assembly has introduced Bill 31, The Property Controls for Grocery Stores and Supermarkets Act — a proposed law that would significantly alter how landlords and tenants negotiate and enforce property rights in the grocery retail sector.
If and when Bill 31 is passed, it will severely limit — and in many cases, outright eliminate — the ability to use restrictive covenants and exclusivity clauses to control who can operate a grocery store or supermarket on a particular site or within a development. Such arrangements are common in the retail sector to retain exclusivity and prevent undue competition of two or more stores in close physical proximity. Retail centres often use such as an arrangement as an inducement for prospective retail tenants.
In this article, we summarize what Bill 31 proposes, what it would mean for property owners and tenants if enacted, and what practical steps can be taken now to prepare.
What Does Bill 31 Do?
Bill 31 proposes to prohibit and void most contractual and title-based restrictions that limit the establishment of grocery stores or supermarkets. This includes both:
- Restrictive covenants on title that prevent land from being used for grocery purposes; and
- Exclusivity clauses in leases and agreements that give certain tenants the exclusive right to operate as the only grocer in a given area.
Once in force, no new restrictions of this kind will be allowed, and most existing ones will be rendered void unless registered within a 180-day grace period — after which even registered restrictions could be subject to challenge on public interest grounds.
For landlords, tenants, and developers, this would mark a major shift in how competition is managed and how developments are positioned in the market.
Which Property Controls Will Be Affected?
Bill 31 targets any agreement or restriction — whether registered on title or not — that seeks to limit or impede the sale, ownership, development, or use of land as a “grocery store” or “supermarket”. Both of these are defined terms. A “grocery store” means a retail store selling a wide range of food products (as defined in the Bill), including fresh and prepared foods, but does not include small convenience stores. A “supermarket” is any grocery store larger than 929 m² (10,000 sq. ft.). Convenience stores, which are defined as being under 280 m² (3,000 sq. ft.), are not impacted by these changes. However, exclusivity clauses for convenience stores are rare in any case.
Any contractual or registered restriction designed to prevent another grocery store or supermarket from opening nearby would likely fall within the Bill’s scope.
What Will Happen to Existing Covenants and Exclusivity Clauses?
All new restrictions will be prohibited and void from the outset once Bill 31 is in effect.
Existing property controls will only survive if they are registered within 180 days after the law comes into force. Even then, registration alone will not guarantee the continued validity of such a restriction. Under the Bill, all registered property controls remain subject to ongoing review and potential cancellation or amendment based on broad public interest considerations.
Any person — including private individuals, competing businesses, municipalities, or the Minister of the provincial government — will be able to initiate a review of a registered property control. Once a review is requested, it can be referred to the Municipal Board, which will be required to hold a formal hearing to determine whether the restriction is contrary to the public interest. The Board is instructed by the Bill not to preserve a restriction unless it can be affirmatively justified as clearly in the public interest. In practical terms, this means that any registered property control could be cancelled, varied, or replaced unless there is compelling evidence that retaining it benefits the broader public — not just the interests of the parties who negotiated it.
What constitutes “public interest” is defined broadly, and the Board will be required to assess whether the restriction imposes:
- Unreasonable geographic limitations — such as barring competitors across an entire neighbourhood or trade area.
- Temporal restrictions that are unduly long-lasting or indefinite.
- Competitive barriers that unfairly limit market access.
- Impacts on community access to grocery stores, including whether the restriction undermines the public’s ability to obtain essential food services conveniently and affordably.
In essence, the Board must ask whether the restriction serves a legitimate public purpose or whether it primarily functions as a private commercial protection — with a clear legislative directive to strike down restrictions that fall into the latter category.
The Board’s powers are not limited to a simple "yes" or "no" decision. It will have broad discretion to vary or amend property controls, meaning that a restriction could be modified rather than fully discharged, depending on the circumstances. For example, a geographic restriction might be narrowed, or a time-limited exclusivity period might be shortened if found excessive.
Although holders of registered property controls will have the right to be heard during these proceedings, including making written submissions and participating in hearings, there is no guarantee that their views will prevail if the Board determines that the public interest demands otherwise.
Notably, these risks apply even during the initial 180-day registration window. Although that period is designed to allow for the preservation of existing controls, unregistered restrictions can still be challenged and reviewed during that time, meaning that parties cannot rely on the 180 days as a "safe harbour" to continue enforcing unregistered restrictions without scrutiny.
Beyond the Municipal Board’s review powers, the Registrar-General will also have the authority to unilaterally discharge registered property controls if deemed void, without any requirement to provide notice to affected parties. This creates another layer of vulnerability for registered restrictions.
Additionally, the Minister will have independent authority to initiate reviews, meaning that the government itself can proactively challenge existing property controls without waiting for a third-party complaint or application. This reflects the government’s stated goal of reducing barriers to competition in the grocery sector as a matter of public policy.
Crucially, once a restriction is deemed void and discharged, it cannot be revived through subsequent registration. The proposed legislation makes clear that attempts to re-register a voided restriction will be refused or automatically discharged without notice, effectively closing the door on efforts to reinstate previously invalidated protections.
Taken together, these measures indicate that even landlords and tenants who successfully navigate the registration process and preserve existing restrictions will remain exposed to future challenges and ongoing uncertainty about the enforceability of those rights.
Will Anyone Be Allowed to Keep Grocery Store Property Controls?
In addition to the above review process, the Bill also includes a few limited exceptions. Namely, the following are exempt:
- Restrictions imposed by government bodies (e.g., through zoning laws or development approvals);
- Development schemes tied to subdivision planning; and
- Other narrow exemptions that may be created by future regulations.
However, for private landlords and tenants, the default position is that grocery-related property controls will be unenforceable going forward.
Notably, Bill 31 also proposes to immediately invalidate exclusivity clauses held by anyone who does not actually own or operate a grocery store or supermarket, or who is not "related" to someone who does. The definition of "related" will be clarified by regulation but is currently undefined — leaving a significant degree of uncertainty. This could affect landlords or developers who have historically negotiated for such clauses as part of their leasing strategies.
Can You Seek Compensation for Lost Rights?
In short, no. The Bill makes it clear that there is no compensation or legal recourse available to anyone impacted by these changes. It contains protections for the government, barring all forms of claims, lawsuits, or demands for compensation, including under contract, tort, restitution, or trust. The Bill further confirms that these measures do not constitute expropriation or injurious affection under law.
What Should Potentially Affected Parties Be Doing Now?
Although Bill 31 is still before the Legislature and not yet law, it represents a significant departure from longstanding commercial leasing practices in Manitoba, particularly for those involved in the grocery retail sector. Given the scope and severity of its proposed effects, the time to prepare is now — well before the law comes into force.
It is essential to undertake a thorough audit of your property portfolio, including leases, development agreements, and title documents, to identify any restrictive covenants, exclusivity clauses, or similar arrangements that may be caught by Bill 31. Many property controls may be embedded in contracts that have not been reviewed in years, and others may be unregistered but still relied upon as part of a larger business strategy. Bringing these to light now will give you the best chance to assess their significance and determine next steps.
Once identified, carefully assess which of these restrictions are critical to your current and future business plans and whether they might be defensible if subjected to public interest scrutiny. Not all restrictions will be equally important or worth the effort to preserve. You should consider which covenants or clauses serve a legitimate purpose — for example, those supporting necessary site planning or protecting critical anchor tenants — and which might simply be aimed at limiting competition. From there, you will need to determine which controls you may wish to attempt to register during the 180-day window, recognizing that registration does not immunize them from future challenge, but failing to register will leave them void and unenforceable.
If you do intend to preserve certain existing restrictions, now is the time to begin assembling the necessary information and documents for registration. This will require detailed records, including accurate legal descriptions of the affected properties, the names of all parties bound by or benefiting from the restrictions, and clear descriptions of the nature and scope of the controls in question. Given the administrative complexity of registration under the proposed Bill, it is key to approach this process methodically and with professional assistance to avoid missteps that could result in rejection or vulnerability to future challenges.
At the same time, landlords, developers, and tenants should re-evaluate their broader leasing and development strategies in light of Bill 31’s potential to eliminate these kinds of property controls altogether. With exclusivity clauses and restrictive covenants likely to be unavailable moving forward, businesses may need to explore alternative methods to protect key tenants, preserve the integrity of retail developments, and ensure that mixed-use sites remain viable and attractive to anchor tenants.
Finally, seeking legal advice early will be critical to navigating this evolving environment. The Bill’s broad language, combined with key uncertainties — including the extent and nature of enforcement — creates significant grey areas that will need careful interpretation and strategy. Fillmore Riley LLP can help review your existing property controls, assess which are defensible, and assist with the technical registration process. Equally important, we can advise on how to adapt your leasing, development, and operational approaches going forward so that you are not relying on controls that will no longer be effective under the new legal framework.
Fillmore Riley LLP's Mergers & Acquisitions Practice
If your business may be affected by these changes or if you have any questions regarding the impact of the Bill, we encourage you to contact a member of Fillmore Riley LLP's Mergers & Acquisitions practice for more information and guidance.