City council looking to evaluate restrictive covenants for grocery stores next week

A city councillor is pushing to allow grocery stores in more places in an effort to lower the cost of food and make neighbourhoods more walkable.

Next week Edmonton city council will be looking to evaluate restrictive covenants and exclusivity controls for grocery stores.

The covenants, specifically with Safeway, make it so no other grocers can open near them or on their property if they leave, and it can stay in place for years.

Ward papastew Coun. Michael Janz said the city has been working on removing the restrictions for nearly two decades.

“We all want to live in a city where there’s more choices for groceries, there’s more competition for grocery stores, where we can have more affordability and accessibility where you’re not having to drive a couple of kilometres to get a gallon of milk,” Janz told CTV News Edmonton Monday.

The restrictions create a monopoly, which Janz said is already an issue in Canada.

“We only have a couple of grocery stores who own all of the subsidiaries and then using this tool just makes things so much worse,” he said.

Grocers are allowed to block other players from opening a competitor on an old site through the restrictions.

“That’s anti-competitive, that’s anti-democratic and that leads to a city where you can’t open a grocery store in a certain area, even if it’s a prime location,” said Janz.

When a grocer sells a property, they have the ability to put the restrictions on the property for an unlimited time, ensuring future owners are unable to open a competing business.

In a letter to the councillor, Sobeys confirmed that it does use restrictive covenants in Edmonton.

“Restrictive covenants are a common feature of grocery and other tenant leases in Canada,” said the letter. “These enable commercial development and improvements in stores and plazas that attract a diverse mix of tenants to effectively serve their respective communities.”

Last summer, the Government of Manitoba banned new restrictive covenants and voided existing ones.

“Since Manitoba implemented these changes, we have been monitoring them closely to see how it could work in Alberta,” said Service Alberta and Red Tape Reduction Minister Dale Nally in a statement Monday.

The motion to remove restrictive covenants and exclusivity controls for grocers will be heard at city hall on March 17.

“I’ve heard that it will be well-received by the provincial government because they, like Manitoba and others, are looking at this, and they realize they want to take action on affordability of groceries,” said Janz. “That’s a top five pocketbook issue for Canadians, and this is a very low-cost way to help enable more choice and completion.”

With files from CTV News Edmonton’s Jeremy Thompson