Talks to add Canadian teams to Pro Rugby North America have broken down.
The Pro Rugby league, founded by New York financier Doug Schoninger, debuted this year with teams in Denver, Ohio, Sacramento, San Diego and San Francisco. There had been expectations that Canada would soon join the league.
Rugby Canada chief executive Allen Vansen said that while there was disagreement over a number of issues, an exclusivity clause that would have prevented Rugby Canada from sanctioning any other professional rugby organization was the primary stumbling block.
"Rugby Canada greatly appreciates the investment Mr. Schoninger and Pro Rugby are making in the development of professional Rugby in North America," Vansen said in a statement. "However, we cannot limit and restrict the opportunities that established international professional rugby would bring to Canada for the benefit of our players and the growth of the game."
In a Facebook post, Schoninger said Rugby Canada had reversed an earlier "exclusive professional sanction," suggesting an interest in partnering with Europe's Guinness Pro12 league was the reason. Pro12 currently includes teams in Ireland, Wales, Scotland and Italy.
"Pro12 does not have a legitimate business plan," Schoninger said of potential North American expansion.
He said his plan called for two teams, one in Toronto and one in Vancouver, made up of Canadian players with "leading international coaches."
"We are saddened that [Rugby Canada] chose to change the agreement at the last moment. I had believed that our partnering with RC would have made our competition and Canada's national team better in many ways," he said.
Rugby Canada said while it believes there is a strong demand for professional rugby in Canada, it will not give up control of the product.
"We are exercising every opportunity possible to strengthen and develop Canadian rugby," Vansen said. "We must act in the best interest of our players, members and stakeholders and any such agreement must be fair and reasonable for Rugby Canada.
"We cannot relinquish control over this important growth opportunity for our game to another organization."