Competition Bureau says its investigation is looking into whether CREA's commission rules discourage buyers' realtors from offering lower commission rates or whether they affect competition in other ways. (Lars Hagberg/Reuters)
The Competition Bureau has secured a court order as part of its investigation into potential anti-competitive practices by the Canadian Real Estate Association (CREA). The bureau is examining whether CREA's commission rules discourage realtors representing buyers from offering lower commission rates and whether these rules hinder competition in other ways.
Another aspect of the inquiry focuses on CREA's realtor co-operation policy. The bureau is looking into whether this policy makes it challenging for alternative listing services to compete with established ones and whether it provides larger brokerages an unfair edge over smaller firms. The court order mandates CREA to provide records and relevant information for the ongoing investigation, which does not imply any wrongdoing at this stage.
CREA boasts over 160,000 members, including real estate brokers, agents, and salespeople. The association stated it is fully cooperating with the bureau's investigation. CREA chair James Mabey expressed confidence in the organization’s rules, asserting that they are "pro-competitive and pro-consumer," enhancing transparency within the industry.
The inquiry began in June after the competition commissioner expressed concerns that CREA’s practices might be limiting real estate agents' ability to compete effectively. According to court documents, CREA owns the Multiple Listing Service (MLS) and the trademark associated with it, as well as the realtor.ca platform, which is used by various real estate groups to list properties.
Websites like realtor.ca allow the public to view home listings, while MLS systems contain more detailed data that is only accessible to agents, including sales activity and neighborhood descriptions, some of which is protected for privacy reasons. Membership to the MLS system is a benefit provided by real estate boards and associations.
In recent years, the Competition Bureau has scrutinized whether limited public access to these systems impedes competition or stifles innovation in the real estate sector. According to the bureau, listings on an MLS must include commission offers to buyers’ agents, and typically, the seller’s agent pays the buyer’s agent upon a sale. The bureau argues that these rules diminish the motivation for buyers’ agents to propose lower commissions since buyers may not consider commission rates when selecting their agents.
Additionally, the bureau claims that CREA's co-operation policy, implemented at the start of 2024, disproportionately benefits larger brokerages, allowing them to advertise to more agents. The policy stipulates that residential listings must be added to an MLS within three days of being marketed publicly, whether through flyers, yard signs, or online promotions. This may hinder alternative listing services, making it harder for them to compete based on privacy or inventory.
Previously, the Competition Bureau investigated data-sharing restrictions imposed by the Quebec Professional Association for Real Estate Brokers, raising concerns about competition in the housing market.
The bureau is now encouraging Canadians—home buyers, sellers, realtors, and other participants in the real estate market—to share their experiences regarding real estate commissions and CREA’s policies. This feedback will assist the bureau in evaluating whether these rules or policies raise legal concerns. Interested individuals can find more information on the bureau's website and are invited to submit their comments by November 6, with all responses treated confidentially, barring specific exceptions.
