“Building Canada Strong” – Bill C-39’s Major Proposed Changes to Federal Labour Law
Twila Reid, ICD.D and Sophie Poulos
Overview
On September 21, 2026, the Government of Canada introduced Bill C-39, the Building Canada Strong Act. Part 3 of the Bill, “Canada Strong for All”, proposes the most significant changes to the federal labour framework in years. These amendments target Part I (Industrial Relations) and Part III of the Canada Labour Code (the “Code”). The Bill remains subject to amendment during the parliamentary process.
These changes would represent a comprehensive restructuring of the federal collective bargaining framework, evidently aimed at supporting employers and unions in collective bargaining and reducing the frequency and impact of work stoppages in the federally regulated sector. This would involve new supports to help parties reach agreements earlier, extended timelines for a negotiated settlement, and a more codified process for those disputes that carry significant national impact.
This update summarizes the key proposed changes and what they would mean for federally regulated employers if enacted.
Parameters for Ministerial intervention
Section 107 of the Code currently gives the Minister of Labour broad authority to act to maintain industrial peace. If passed, the Bill would replace section 107 with a more structured framework for intervention. A new Special Mediator process (appointable within 75 days of a conciliation officer’s appointment, for a 21-day mandate) would give the parties a further, dedicated opportunity to reach a negotiated settlement, with a public report to follow if no agreement is reached. Only where a work stoppage is underway, and only after the Minister has (1) considered the Special Mediator’s report and (2) formed the opinion that the work stoppage adversely affects, or may adversely affect, the “national interest”, could the Minister direct the Canada Industrial Relations Board (“CIRB”) to order a resumption of operations, extend an existing agreement on an interim basis, or impose binding arbitration.
In assessing whether a work stoppage may affect the national interest, the proposed amendments specify that the Minister may consider:
- 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 Board has any impact on the freedom of association.
For businesses where a work stoppage could have broad economic or public consequences, this creates a more predictable process, with defined steps to support a negotiated resolution before ministerial intervention becomes available. The appointment of a Special Mediator does not suspend the parties’ right to strike or lockout.
Earlier bargaining for high-risk relationships
Under the current framework, parties can begin bargaining as early as four months before collective agreement expiry, with no mandated start date. Through the proposed addition of section 50.1, in circumstances where the prior round of bargaining ended in a work stoppage or imposed arbitration, or where the collective agreement has a term of five years or more, bargaining would be required to begin between 200 and 180 days before expiry of the agreement. Written notice to the Minister of Labour and the CIRB and support from the Federal Mediation and Conciliation Service (“FMCS”) would also be required.
For relationships with a history of difficult bargaining or longer-term agreements, this earlier timeline appears intended to give the parties more room for preparation, mandate-setting, and negotiation before running up against the expiry of the existing collective agreement, with corresponding early FMCS involvement likely designed to make this early engagement as productive as possible.
Longer conciliation period
The current mandatory conciliation period (following a notice of dispute and the appointment of a conciliation officer) is 60 days. The Bill would extend this to a 90-day minimum for all parties, giving the conciliation officer more time to work toward a negotiated agreement before conciliation ends and the report to the Minister is due.
This extends the window for a negotiated settlement by an additional 30 days before the right to strike or lockout becomes available.
Changes for first collective agreements
The Bill would add a new section 35.1, requiring FMCS to engage with parties immediately once a union certification order is issued. In addition, the Bill would amend section 80 so that, if a first collective agreement has not been reached within nine months of notice to bargain, either party may apply (on a no-fault basis) to the CIRB for resolution of the issues in dispute. The CIRB must order a binding method of resolution on such an application, though the parties remain free to negotiate and conclude their own agreement at any time before a determination is made.
For newly certified bargaining units, this purports to provide for earlier, more structured FMCS involvement from the outset and a clearer avenue for parties to seek a resolution outside of direct negotiations, aimed at assisting the parties in reaching a first agreement.
Mandatory post-dispute remediation
Currently, post-dispute remediation support is available through the FMCS but is not mandatory. Where a collective agreement follows an imposed arbitration or a work stoppage, the Bill would require the Minister to appoint a mediator within six months of a new collective agreement to help the parties improve their working relationship.
This gives parties coming out of a difficult bargaining round structured support to rebuild their working relationship, aimed at reducing the likelihood of repeat disputes.
Broader opportunities to initiate geographic certification
Section 34 of the Code currently allows a trade union representing employees of two or more employers in the longshoring industry (and other industries designated by regulation) in a geographic area to apply for a single certified bargaining agent. If passed, the Bill would amend section 34 to also allow employers, the Minister, or the CIRB to initiate this process, with the CIRB retaining independent authority to decide whether geographic certification is appropriate.
This would allow for expanded use of geographic certification (where existing requirements under section 34(2) of the Code are also met), which could consolidate bargaining structures across an industry and geographic area. This may simplify labour relations for some federal employers, while others accustomed to separate bargaining units may see reduced flexibility.
Expedited grievance arbitration
If passed, the Bill would allow for future regulations establishing expedited grievance arbitration processes. Faster arbitration timelines would help address grievance backlogs, which could reduce long-term liability exposure from aging claims.
Administrative monetary penalties for bad-faith bargaining
The Bill would also amend section 111.01 of the Code by expanding the existing regulatory authority to create an administrative monetary penalty regime, extending it to bad-faith bargaining conduct under section 50 and the proposed section 50.1.
If the Bill passes and implementing regulations are put in place, conduct at the table would be subject to the same administrative monetary penalty framework that already applies to other obligations under the Code.
Extended successor rights in the air sector
If passed, the Bill would amend section 44 to extend successor rights, traditionally tied to the sale of a business, to contract retendering at airports (and certain other prescribed industries). This would preserve union representation and the collective agreement when a service contract moves to a new contractor.
If enacted, employers bidding on federally regulated airport and air transportation service contracts should be mindful that workforce and collective agreement obligations may transfer with the contract and should plan to price and staff these transitions accordingly.
Increased enforcement for misclassification, wage theft, and workplace safety
As part of a broader package, the government has also proposed adding 100 new health and safety officers (a roughly 70% increase in inspection capacity), 26 new CIRB staff to clear complaint backlogs, and more inspectors targeting worker misclassification and wage theft.
These measures reflect an increased focus on worker misclassification, wage theft, and workplace safety compliance, particularly in trucking and other sectors with contractor arrangements. Reviewing worker classification practices, health and safety programs (including psychological health and safety), and wage payment compliance now can help workplaces stay ahead of the increased inspection and enforcement capacity.
Clarification on paid medical leave: minimum floor, not a stacking entitlement
Since December 2022, federally regulated private sector employees have been entitled to up to ten days of paid medical leave per year. If passed, the Bill would amend Part III of the Code to clarify that this entitlement is a minimum floor rather than an additional benefit layered on top of an equivalent or greater collectively bargained leave.
Accordingly, workplaces with collectively bargained medical or sick leave would not need to provide the statutory leave in addition, provided the collective agreement confers rights and benefits at least as favourable as the statutory ten-day entitlement.
What’s next?
If passed as drafted, Bill C-39 would materially change the operational landscape for federally regulated employers, particularly in collective bargaining. The second reading of the Bill is currently in progress, and our Labour and Employment team will continue to closely monitor its development. We encourage federally regulated employers to follow along and consider the impacts of the proposed changes on their operations.
This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact the authors, or a member of our Labour and Employment Group.
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