Labour code changes expected to intensify competition for talent, reshape brokerage structures, and alter compliance risk
Ottawa’s plan to curb the use of non-compete agreements in federally regulated sectors may set off a wave of change across Canada’s mortgage ecosystem, from lenders and broker networks to technology providers.
The proposed reform, likely to be included in the upcoming federal budget and scheduled for consultations next year, would amend the Canada Labour Code to restrict most clauses that prevent workers from moving to competing firms or starting their own businesses.
While positioned as a pro-worker measure, it could have deep ripple effects in financial services — particularly the mortgage market, where expertise and client relationships are closely held assets.
For lenders and brokerages, the new environment would likely mean far greater staff mobility. Experienced underwriters, business-development managers and mortgage agents could move more freely between institutions, intensifying the competition for talent that already defines the industry.
Compensation packages, signing incentives, and training programs are all expected to rise in strategic importance as firms look for ways to keep high-performing employees.
The removal of non-compete restrictions could also alter how broker networks manage their teams and protect their books of business. Without legal barriers preventing agents from joining rival networks or setting up independent shops, retaining top performers will depend increasingly on service quality, brand strength, and technology integration.
Larger networks with established digital platforms may gain an advantage by offering agents stronger client-management systems and lead pipelines that are difficult to replicate elsewhere.
At the same time, the rule change may encourage entrepreneurship. Freed from contractual limitations, experienced mortgage professionals could establish new brokerages or technology start-ups focused on niche lending or digital origination.
Over time, that could make the market more dynamic — but also more fragmented — as small firms enter and compete on pricing, turnaround times, and specialization.
The transition will require careful compliance planning. Employers will need to review contracts to ensure that existing non-compete language aligns with the new federal standard once enacted.
In place of non-competes, many organizations are expected to rely more heavily on non-solicitation and confidentiality clauses to protect client lists and proprietary data. Legal advisors warn that enforcing those provisions will require clearer documentation and stricter data-access controls.
For the insurance and risk-management community that services mortgage lenders and brokerages, the reform could translate into new exposures. Greater staff mobility raises the risk of disputes over client solicitation and data use, potentially increasing demand for Employment Practices Liability and Errors and Omissions coverage within the mortgage sector.
Over the longer term, the change may lead to a more innovative, competitive industry. Knowledge will circulate more freely, and new entrants could bring fresh perspectives to underwriting, technology adoption, and customer service.
But in the short run, firms may face higher operating costs, elevated compliance risks, and increased churn among skilled employees.
The 2025 budget’s labour-mobility reforms signal a structural shift in how Canadian mortgage businesses attract and retain talent. They promise a more open marketplace — but one that rewards organizations capable of combining strong culture, advanced digital infrastructure, and disciplined risk management in a newly fluid environment.
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