This bill directs the provincial government to produce and publish a plan to improve affordability for all food products and non‑alcoholic beverages. The plan must address structural barriers to price competition among retailers and pursue changes to the tax treatment of grocery purchases.
The measure targets two levers: commercial arrangements that restrict where grocers can operate and the tax layer that applies to food. The bill is aimed at reducing retail price pressure and increasing pricing transparency by using provincial legislative power and by seeking federal cooperation on tax changes.
At a Glance
What It Does
The Act requires the government to prepare a plan (to be published online) that includes developing legislation to void and prohibit restrictive covenants, exclusivity clauses and other real‑property controls that limit competition among food retailers, and directing the Minister of Finance to take specified steps toward removing the HST on food and non‑alcoholic beverages, including statutory amendments and negotiations with the federal government.
Who It Affects
Large grocery chains and shopping‑centre landlords that rely on exclusivity and restrictive covenants, independent grocers seeking market entry, provincial ministries (Public and Business Service Delivery and Procurement; Finance), municipalities (consultation required) and Ontario consumers, particularly lower‑income households who spend a larger share of income on food.
Why It Matters
This is a two‑pronged provincial effort that attacks both market structure and tax policy: clearing contractual property barriers could change competitive dynamics in retail real estate, while any HST removal requires provincial legislative changes plus federal agreement — a rare cross‑jurisdictional move that would affect provincial revenue and the retail price of groceries.
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What This Bill Actually Does
The Act creates a short menu of required actions rather than prescribing a detailed regulatory regime. It orders the government to assemble a plan and makes publication mandatory; beyond that it compels two concrete policy tracks.
First, the Minister of Public and Business Service Delivery and Procurement must develop and introduce legislation that renders unenforceable—and then prohibits—the kinds of real‑property controls (restrictive covenants, exclusivity clauses and similar contractual limits) that the bill identifies as constraining retail competition. The bill also directs that penalties be included in that new legislation and that municipalities be consulted as part of its development.
Second, the Minister of Finance must pursue a tax pathway: amend provincial sales tax law to remove the Ontario portion of the HST on food and non‑alcoholic beverages, negotiate with the federal Minister to amend the province–federal coordination agreement referenced in the Retail Sales Tax Act, and formally request that the federal Minister remove the federal tax component under federal Excise Tax Act authority. Those steps map out the legal and intergovernmental actions Ontario deems necessary but do not by themselves accomplish the federal changes.Practically, the bill leaves important design choices to later legislation and to negotiation.
The property‑controls track requires drafting familiar‑sounding but legally consequential tools—voiding existing private contracts and creating criminal or administrative penalties for future use—while the tax track depends on an amendment process that requires federal consent. The Act also sets timing expectations by requiring the plan be developed promptly and posted online, and it makes the statute effective upon royal assent, so any subsequent legislative or regulatory instruments will flow from that starting point.
The Five Things You Need to Know
The government must develop the required food affordability plan within 12 months of the Act coming into force.
Section 2 directs the provincial minister to draft legislation that (a) declares restrictive covenants and exclusivity clauses void, (b) prohibits their use going forward, and (c) creates penalties for contraventions.
Section 3 requires the Minister of Finance to amend the Retail Sales Tax Act to remove the Ontario portion of the HST on food products and non‑alcoholic beverages and to handle all consequential legislative and regulatory changes.
The bill compels Ontario to seek a formal amendment to the province–federal tax coordination agreement (the Comprehensive Integrated Tax Coordination Agreement referenced in section 50 of the Retail Sales Tax Act) and to request that the federal Minister remove the federal tax under subsection 165(1) of the Excise Tax Act.
The Minister of Public and Business Service Delivery and Procurement must consult municipalities while developing the legislation aimed at property controls, and the final plan must be published on a Government of Ontario website.
Section-by-Section Breakdown
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Mandate to create and publish a food affordability plan
Section 1 requires the government to prepare a plan to improve affordability for all food products and non‑alcoholic beverages and to publish it online. The clause sets a prompt development schedule (12 months) and makes plan publication an explicit obligation—meaning the content and transparency of proposed measures are matters for public record rather than confidential policy work.
Void and prohibit real‑property restraints that limit retail competition
Section 2 assigns the Minister of Public and Business Service Delivery and Procurement the task of developing legislation that will (1) declare void restrictive covenants, exclusivity clauses and other property controls that restrict competition among food retailers, (2) prohibit their future use, and (3) impose penalties for breaches. The provision also requires municipal consultation. In practice, this is a road map for statutory interference with private contractual rights in commercial real estate and will require drafters to define the scope (what counts as a restrictive covenant), procedural mechanisms for enforcement, and the penalty structure.
Provincial steps to remove the HST on groceries and seek federal cooperation
Section 3 tasks the Minister of Finance with taking ‘all necessary steps’ toward removing the HST on food products and non‑alcoholic beverages. The bill lists concrete actions: amend the Retail Sales Tax Act to eliminate the Ontario HST portion, enter into an amended province–federal tax coordination agreement under the Act’s section 50 framework, and make a formal request to the federal Minister to remove the federal tax component under the Excise Tax Act. Those are procedural and legal prerequisites: the federal removal requires federal action and intergovernmental agreement.
Timing, commencement and context
Section 4 makes the Act come into force on royal assent; Section 5 provides the short title. The preamble frames the policy rationale—high food prices and market concentration—but has no operative force. Together these parts signal that the legislature intends to start the policy clock immediately, while leaving the detailed instruments and intergovernmental negotiations to follow.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Low‑ and fixed‑income households — Reduced taxes and increased retail competition aim to lower retail grocery prices, which would directly reduce out‑of‑pocket food costs for households that spend a larger share of income on groceries.
- Independent and new entrant grocers — Removing exclusivity clauses and restrictive covenants could ease market entry into shopping centres and neighbourhoods currently restricted by incumbents, improving their ability to compete.
- Consumers seeking transparency — The publication requirement and the bill’s focus on prohibiting opaque contractual restraints are designed to make pricing drivers and competitive barriers more visible and contestable.
Who Bears the Cost
- Large grocery chains and shopping‑centre landlords — They could lose contractual protections that preserve market share and rent premiums; that may reduce the value of existing lease portfolios and alter competitive strategies.
- Provincial treasury — Removing the Ontario portion of the HST will reduce provincial sales tax revenue unless offset by alternative revenue measures or spending cuts.
- Municipalities and property owners — Municipalities face consultation obligations and may need to revise local planning approaches; property owners may face diminished asset values and increased litigation risk.
- Legal and compliance advisers — Businesses will incur advisory, contract‑restructuring and potential litigation costs as parties challenge, defend or adapt to the voiding of contractual restraints.
Key Issues
The Core Tension
The central dilemma is straightforward but acute: reduce grocery prices by stripping away contractual and tax barriers to competition, or preserve legal certainty, property rights and provincial fiscal stability. The bill solves affordability pressure by attacking private restraints and a tax layer, but doing so risks litigation, investment disincentives in retail real estate, and a significant hit to public revenues unless compensated—trade‑offs with no clean technical fix.
The bill delegates hard choices to later instruments, which creates implementation risk. Declaring existing private contractual restraints void raises obvious legal challenges: affected landlords and tenants will press constitutional, property and contract‑law arguments, and the government may face claims for compensation or damages.
Drafting a robust statutory definition of “restrictive covenants” and choosing an enforcement regime (civil, administrative fines, or criminal penalties) will determine whether the policy produces quick competition or prolonged courtroom fights.
On the tax side, the province can amend its own sales tax statute but cannot unilaterally eliminate the federal portion of the HST; that requires federal agreement. The Act therefore makes the removal of the tax contingent on intergovernmental steps that may be politically or fiscally difficult.
Provincial revenue loss from removing the Ontario HST portion will need concrete offsets; absent those, the change could force expenditure reductions or alternative tax measures. Finally, the bill leaves key definitional and operational questions open—what precise items qualify as ‘food products and non‑alcoholic beverages,’ how penalties will be calibrated, and how the legislation will treat pre‑existing, long‑term commercial arrangements—each of which will determine both legal vulnerability and economic impact.
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