Federal Government Proposes Significant Amendments to the Canada Labour Code

On September 21, 2026, the federal government introduced Bill C-39, the Building Canada Strong Act (“Bill C-39”), at first reading. Among other measures, the omnibus bill proposes extensive amendments to the Canada Labour Code (“Code”), representing some of the most significant changes in recent years for federally regulated workplaces. The proposed changes to the Code are found at Part 3 of Bill C-39.

Proposed amendments include:

• • Early bargaining requirements;
  • Longer conciliation period and post-bargaining mediation;
  • Expanded contractor successor rights;
  • Narrower framework for ministerial intervention (section 107);
  • New special mediation process;
  • Expanded sectoral and multi-employer bargaining;
  • Enhanced mechanisms for first collective agreements;
  • Expedited grievance arbitration;
  • Enhanced administrative monetary penalty framework;
  • Paid medical leave exemption for unionized workplaces (where applicable);
  • Enhanced wage recovery enforcement; and
  • Additional worker protection measures.

Early Bargaining Requirements

Currently, the Code does not prescribe when parties must begin bargaining. Instead, it allows parties to bargain as early as four (4) months prior to the expiry of their collective agreement, and once the notice to bargain is served, the statutory freeze and the duty to bargain in good faith under section 50 of the Code are triggered.

Bill C-39 would introduce a new section 50.1, which would require certain parties to a collective agreement to commence collective bargaining earlier. The key changes are:

• The parties to a collective agreement must meet and commence collective bargaining during the period that begins 200 days and ends 180 days before the day on which the term of the collective agreement expires, if:
  • The collective agreement was reached through a binding dispute resolution process imposed on the parties;
  • The collective agreement was reached after a strike or lockout; or
  • The collective agreement has a term of five (5) years or more.

Before bargaining begins, the parties would need to provide written notice to the Minister of Labour and the Canada Industrial Relations Board (“CIRB”) indicating the date and location of the first collective bargaining meeting and the contact information for each party, and would also have to engage with the Federal Mediation and Conciliation Service (“FMCS”).

The employer’s obligation not to alter terms and conditions of employment without the bargaining agent’s consent (statutory freeze) would be triggered as of the 200^th day before expiry.

Longer Conciliation Period and Post-Bargaining Mediation

Currently, when parties cannot reach an agreement and negotiations to renew the collective agreement reach an impasse, a conciliation officer from the FMCS may be appointed to work with them. The Code currently sets a 60-day conciliation period, and Bill C-39 will extend the conciliation period to 90 days for all parties subject to Part I of the Code (to provide more time to reach negotiated settlements before escalation to strikes or lockouts).

Furthermore, Bill C-39 would require that the Minister of Labour appoint a mediator to confer with the parties and endeavour to assist them in improving their relationship where they experienced a work stoppage and/or had a binding method of resolution imposed. This would occur within six (6) months of reaching a collective agreement. The stated purpose is to help repair damaged labour relations before the next round of bargaining.

Expanded Contractor Successor Rights

Bill C-39 proposes to expand the successor rights provisions of the Code, starting with airports and prescribed industries. Currently, section 44 of the Code addresses successor rights arising from business sales, transfers, and certain jurisdictional changes, whereas section 47.3 of the Code provides limited wage-rate protections in certain successor-contractor situations. Bill C-39 proposes a new framework related to the succession of a previous contractor by a new contractor, with the following key changes:

• Where a new contractor succeeds a previous contractor:
  • The bargaining agent for the employees of the previous contractor becomes the bargaining agent for the employees of the new contractor;
  • A trade union that had applied for certification in respect of any employees of the previous contractor before the date of succession may, subject to Part I of the Code, be certified by the CIRB as the bargaining agent for the employees of the new contractor;
  • The new contractor is bound by any collective agreement that is, on the date of succession, applicable to the employees of the previous contractor; and
  • The new contractor becomes a party to any proceeding taken under Part I of the Code that is pending on the date of succession and that affects the employees of the new contractor or their bargaining agent.
• A “new contractor” would mean an employer who, in accordance with a contract or other arrangement, provides the same or substantially similar services as those provided by a previous contractor.
• A “previous contractor” would mean an employer who, under the terms of a contract or other arrangement that is no longer in force:
  • Provided services at an airport to another employer, or to a person acting on behalf of that other employer, in an industry referred to in paragraph (e) of the definition federal work, undertaking or business in section 2 of the Code;
  • Provided prescribed services to another employer, or to a person acting on behalf of that other employer, in a prescribed industry; or
  • Provided prescribed services at a prescribed location to another employer, or to a person acting on behalf of that other employer, in a prescribed industry.
• The Governor in Council could make regulations prescribing services, industries or locations for the purposes of the definition a “previous contractor”.
• The existing section 47.3 of the Code, which provides limited wage-rate protections in certain successor-contractor situations, would be repealed.
• The concept of “succession of a previous contractor by a new contractor” would also be added to section 45 of the Code regarding the review of bargaining units (and section 46 of the Code which currently requires the CIRB to determine any question that arises under section 44, including a question as to whether or not a business has been sold or there has been a change of activity of a business, or as to the identity of the purchaser of a business).

Narrower Framework for Ministerial Intervention (Section 107)

Section 107 of the Code currently gives the Minister of Labour authority to take measures deemed necessary to maintain or secure industrial peace and promote conditions favourable to the settlement of industrial disputes.

Bill C-39 proposes the following key changes:

• If a lawful strike or lockout occurs, the Minister of Labour could direct the CIRB to order the resumption or continuation of the employer’s operations or of the employees’ duties of employment, extend the term of the collective agreement or impose a binding method of resolving the issues in dispute only if:
  • The Minister has considered the special mediator’s report (explained later below); and
  • The Minister is of the opinion that the strike or lockout that is underway adversely affects or may adversely affect the “national interest”. C-39 includes considerations that the Minister may take into account with respect to the “national interest”, including but not limited to:
    • Whether the strike or lockout has or may have any significant impact on the Canadian economy;
    • Whether the strike or lockout is causing or may cause any serious social disruption; and
    • Whether the Minister’s direction to the CIRB has any impact on the freedom of association.

The federal government has indicated that Bill C-39 establishes a clearer and more transparent framework for the use of these authorities in the exceptional circumstance of a labour dispute that threatens to have significant national impacts. It would clarify the Minister’s existing authorities under section 107, and provide two (2) requirements before it can be invoked.

New Special Mediation Process

Bill C-39 would create a new Division V.01 in Part I of the Code to establish a formal special mediation process, with the following key measures:

• The Minister of Labour may appoint a special mediator at any time, but no later than the 75^th day after the day on which a conciliation officer or conciliation commissioner is appointed or a conciliation board is established.
• The special mediator is appointed for a period of 21 days.
• The special mediator must:
  • Confer with the parties to a dispute and endeavour to assist them in settling it;
  • Unless the parties enter into, renew or revise a collective agreement, or reach a tentative agreement for the purpose of entering into, renewing or revising a collective agreement, provide a report to the Minister without delay after the end of the period for which the special mediator is appointed; and
  • Provide a report to the Minister without delay, if one of the parties rejects the tentative agreement.
• The special mediator’s report must set out the issues in dispute, the parties’ positions on the issues, an assessment of the parties’ participation, the likelihood that the parties will enter into, renew or revise a collective agreement within a reasonable time and the special mediator’s views and recommendations.
• The Minister must provide a copy of the report to the parties without delay and, in most circumstances, make the report available to the public within the established timeline.

Bill C-39 provides that the purpose of this Division is to have the special mediation process take place before the day on which a strike may be declared or authorized or a lockout may be declared or caused, and to provide a minimum period of 10 days after the special mediator’s report is made available to the public before a strike or lockout.

Bill C-39 would also provide the following clarification in terms of process:

• The Minister’s appointment of a special mediator is to occur no later than the 75^th day after the conciliation period begins;
• The special mediator will have 21 days to mediate the dispute between the parties;
• Unless the parties reach a collective agreement, the special mediator will provide a report to the Minister at the end of the 21 days;
• The special mediator will provide a report to the Minister without delay following the rejection of a tentative agreement;
• The Minister will provide the report to the parties without delay;
• If the parties do not reach a collective agreement during the special mediator’s mandate or during the five (5) days after it, the Minister will make the report available to the public without delay;
• If a tentative agreement is rejected, the Minister will make the report available to the public within a five (5)-day period; and
• The appointment of a special mediator does not suspend the right to strike or lockout.

Expanded Sectoral and Multi-Employer Bargaining

Currently, subsection 34(1) of the Code provides that where employees are employed in: (i) the long-shoring industry, or (ii) such other industry in such geographic area as may be designated by regulation of the Governor in Council on the recommendation of the Board, the CIRB may determine that the employees of two (2) or more employers actively engaged in the industry in the geographic area constitute a unit appropriate for collective bargaining and may, subject to Part I of the Code, certify a trade union as the bargaining agent for the unit.

Bill C-39 would expand this framework.

For instance, the CIRB could, on application by two (2) or more employers actively engaged in an industry in a geographic area, on the Minister of Labour’s referral or on the CIRB’s own initiative, determine that two (2) or more bargaining units consisting of employees of certain employers actively engaged in that industry in that geographic area constitute a unit appropriate for collective bargaining and may certify a trade union as the bargaining agent for the unit, if the employees are employed in: (i) the long-shoring industry; or (ii) any other industry in any geographic area that may be designated by regulation of the Governor in Council on the recommendation of the CIRB.

There would also be a new provision that would require a newly certified union to provide a copy of its certification order to the Minister of Labour without delay, following which the FMCS would have to engage with the parties to assist in entering into a first collective agreement.

Enhanced Mechanisms for First Collective Agreements

Bill C-39 proposes to change the framework under section 80 of the Code regarding the settlement of a first collective agreement. The key changes would include:

• Either party could apply to the CIRB to direct a binding method of resolution when a first collective agreement has not been entered into within nine (9) months after the day on which the notice to bargain was given.
• The CIRB would, by order, direct a binding method of resolving the issues that remain in dispute between the parties.
• The parties would be able to enter into a collective agreement at any time before a binding determination is made resolving the issues in dispute between them.
• An order issued by the CIRB directing a binding method of resolving the issues that remain in dispute between the parties would suspend the right to strike or lockout until a binding determination is made resolving those issues or the parties enter into a collective agreement.

Expedited Grievance Arbitration

All collective agreements must contain grievance resolution mechanisms, but in some sectors, grievances can accumulate into significant backlogs that strain labour relations and make disputes harder to solve. Bill C-39 would allow future regulations to be established for expedited grievance arbitration processes to address systemic backlogs and support more timely constructive labour relations.

Enhanced Administrative Monetary Penalty Framework

Bill C-39 proposes to amend section 111.01 of the Code with respect to administrative monetary penalties to include sections 50 (and the proposed section 50.1, previously addressed), which would allow the Governor in Council to make regulations establishing an administrative monetary penalties scheme for the purpose of promoting compliance with those sections (good-faith bargaining and statutory freeze).

Paid Medical Leave Exemption for Unionized Workplaces

Bill C-39 proposes to amend section 239 of the Code by introducing a narrow exemption from the statutory medical leave of absence with pay for unionized employers. The exemption would apply where a collective agreement:

• Confers on employees rights and benefits that serve the same purpose as medical leave of absence with pay;
• Are at least as favourable in that regard as those conferred by the Code;
• Provides for the settlement of disagreements by a third party.

In such a case, the collective agreement would apply exclusively to the settlement of disagreements relating to those rights and benefits.

Enhanced Wage Recovery Enforcement

Bill C-39 proposes to enhance the wage recovery enforcement framework under Part III of the Code. The key changes include:

• Authorizing the Head of Compliance and Enforcement to issue a settlement enforcement order requiring an employer, or in certain circumstances, a director of a corporation, to pay any outstanding amounts that are to be paid under a settlement with an employee; and
• Permitting an order to debtor to be issued, in certain circumstances, before a settlement enforcement order or payment order has been issued.

The Wage Earner Protection Program Act would also be amended to, among other things, define the term “former employer” for the purposes of that legislation and to specify that the Minister may confirm, vary or rescind a determination of eligibility even without a request for review.

Additional Worker Protection Measures

The federal government has also announced additional measures to provide supports for workers and strengthen workplace protections, such as:

• Providing additional support to strengthen compliance, enforcement, and introduce digital tools to address wage theft and employee misclassification, with a focus on the trucking industry;
• Enhancing workplace safety measures, including supporting more inspections, prevention activities, enforcement, and return-to-work supports, to improve safety, retention, and productivity; and
• Targeted investments to bolster CIRB capacity to address growing caseloads and backlogs, reducing delays and helping ensure complaints are adjudicated in a timely, credible, and effective manner.

In Our View

The proposed amendments to the Code represent some of the most significant changes in recent years for federally regulated workplaces. We will continue to monitor Bill C-39 and keep our Focus Alert readers updated on future important developments.

For more information, please contact Steven P. Williams at 613-697-6869 or Lauren Jamieson at 613-404-5058.