As Canada reshapes its trade framework and proceeds with numerous measures to enhance industries across the country, the federal government has tabled An Act respecting certain measures to strengthen the economy or, Bill C-39, which proposes significant reforms to federal labour and employment law.1
Divided into three parts, Part 3 of the Bill, Canada Strong For All, introduces the brunt of these amendments to the Canada Labour Code (“CLC“) and the Wage Earner Protection Program Act (WEPPA). Below are some of the key changes proposed that will affect collective bargaining processes, wage recovery enforcement, and paid medical leave and thereby federally regulated employers.
Changes to CLC, Part I – Industrial Relations
Earlier Engagement in Collective Bargaining and New Wage Freeze
Where a collective agreement resulted from an imposed arbitration, a strike or lockout, or has a term of five or more years, parties will be required to commence bargaining between 200 and 180 days before expiry, well ahead of the standard timeline.2 Critically, a wage and conditions freeze will take effect at the 200-day mark: employers may not alter pay or working conditions without union consent until the preconditions for a lawful strike or lockout are met.3 Before bargaining commences, the parties will be required to give written notice to the Minister of Labour and the Canada Industrial Relations Board, and immediately engage with the Federal Mediation and Conciliation Service.4
Employers with contentious bargaining histories or long-term agreements should begin preparing for negotiations significantly earlier than before and must plan any operational or compensation changes around the earlier freeze window.
National Interest – Return to Work
Bill C-39 expands on section 107 of the CLC and establishes a more detailed framework for back-to-work orders. Under the new provisions, the Minister will only be able to order a return to work or impose binding arbitration during a lawful dispute if a Special Mediator’s report (discussed further below) has been considered and the Minister is of the opinion that the strike or lockout may negatively affect the national interest. Whether or not the national interest is affected will depend on factors which include the following:
- 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.5
Ministerial emergency powers over ports are also expressly prohibited from being used to end a strike or lockout.6
Special Mediation
A new special mediator process applies during conciliation, with the mediator appointed no later than 75 days after a conciliation officer or board is appointed, for a mandate of 21 days.7 The mediator’s report – including an assessment of each party’s conduct and bargaining positions8 – must be provided to the parties without delay by the Minister and, in most circumstances, made available to the public without delay after a five-day period following the end of the special mediator’s mandate. The appointment of a special mediator does not suspend the right to strike or lockout.9 The special mediator will be required to report to the Minister if no collective or tentative agreement is reached. Similarly, a report will be required if a tentative agreement is later rejected.
Employers emerging from contentious bargaining rounds should budget time and resources for mandatory post-deal relationship repair sessions. Additionally, the Ministerial back-to-work intervention is now procedurally constrained. The requirement to consider the mediator’s report and make a national-interest finding raises the threshold for government intervention and provides a more clearly reviewable record for judicial review applications.
Contractor Succession Rights
The CLC will also include a contractor succession framework for federally regulated workplaces.
When a “new contractor”10 replaces a “previous contractor”11 providing services at an airport or in a prescribed industry or location, it automatically inherits the previous contractor’s bargaining agent, collective agreement, and any pending proceedings before the Canada Industrial Relations Board (CIRB).12 The Governor in Council may extend this framework to additional industries and locations by regulation.13
This could now mean that labour due diligence at the tendering stage of a request for proposals must include a full review of the prior contractor’s collective agreement, bargaining unit structure, and any pending CIRB proceedings.
Multi-Employer (Sector-Wide) Certification
Bill C-39 gives the CIRB a new power to certify a trade union as bargaining agent across two or more bargaining units of employees employed by different employers in the same industry and geographic area.14 This power can be triggered on application by two or more employers in the industry/area, by ministerial referral, or by the CIRB on its own initiative.15
First Collective Agreements – Accelerated Process
Section 80 of the CLC will be amended to provide a more streamlined process for first collective agreements. Where the parties have not entered into a first collective agreement within nine months after notice to bargain collectively was given under s. 48, either party may now apply to the CIRB for an order directing a binding method of resolving the remaining issues in dispute, and the Board must issue such an order.16
Once the Board issues such an order, the right to strike or lockout is suspended until a binding determination is made or a collective agreement is reached.17 When a trade union is certified, it will be required to provide a copy of the certification order to the Minister without delay, and the FMCS will be required to engage with the parties toward reaching a first collective agreement.18
This process is considerably more structured (and swifter) than the current regime. Early, proactive engagement with a newly certified union is more important than ever.
Changes to CLC, Part III – Labour Standards
Paid Medical Leave: Collective Agreement Exemption
Under Bill C-39, unionized employers in the federal sector may be exempt from the statutory medical leave with pay regime. Where a collective agreement provides paid medical leave at least as favourable as the statutory standard under Part III of the Canada Labour Code, and includes third-party dispute resolution, the statutory medical leave provisions do not apply – the collective agreement governs exclusively.19
Reviewing collective agreements to assess whether their sick leave provisions qualify for this exemption and consider negotiating qualifying provisions in upcoming rounds could be advantageous for employers at this stage.
Stronger Wage Recovery and Inclusion of Director Liability
New settlement enforcement orders will allow the Head of Compliance and Enforcement to order an employer (or director of the corporation personally) to pay amounts owing under an unpaid wage settlement.20 Directors will have limited recourse, with appeal rights confined to whether they are personally liable, and employers will be unable to challenge settlement enforcement orders themselves.21
Additionally, a pre-emptive “order to debtor” may also redirect an employer’s receivables toward wage recovery before any formal finding of liability.22 This will be available before a final payment order or settlement enforcement order has been issued, or where the Head of Compliance and Enforcement has reasonable grounds to conclude that the employer will fail to pay.23
An administrative fee equal to the greater of $200 or 15% of the amounts owed is automatically added to settlement enforcement orders and payment orders.24 After 15 days, a settlement enforcement order may be filed in the Federal Court and enforced as a court judgment.25
These changes significantly strengthen the government’s wage recovery toolkit. Directors of federally regulated corporations now face direct personal exposure for unpaid wage settlements, not only for unpaid wages under existing payment orders. The pre-emptive order-to-debtor mechanism could create cash-flow risk for employers facing wage complaints, even before liability is determined. Employers and their directors would be wise to ensure that written wage settlements are honoured promptly.
What this Means for Employers in Canada
The reforms introduced by Bill C-39 would require federally regulated employers to take stock of their current practices, collective agreements, and director-level governance arrangements sooner rather than later. Federally regulated employers should review their current practices and collective agreements considering these potential reforms.
Footnotes
1 Bill C-39, An Act respecting certain measures to strengthen the economy, 1st Sess, 45th Parl, 2026 (first reading 21 September 2026) [Bill C-39].
2 Canada Labour Code, RSC 1985, c L-2, s 50.1, as amended by Bill C-39, s. 315 [CLC].
3 CLC, s. 50.1(1)(a) -(c), as amended by Bill C-39, s. 315.
4 CLC, s. 50.1(4), as amended by Bill C-39, s. 315.
5 CLC, s. 107(2)-(3), as amended by Bill C-39, s. 334.
6 Canada Marine Act, S.C. 1998, c.10, s. 102.2, as amended by Bill C-39, s. 250.
7 CLC, s. 87.01, as amended by Bill C-39, s. 322.
8 CLC, s. 87.01(3), as amended by Bill C-39, s. 322.
9 CLC, s. 87.02(1) and s. 87.03, as amended by Bill C-39, s. 322.
10 “New contractor” is a newly defined term in the CLC. See CLC, s. 44(1), as amended by Bill C-39, s. 310(1).
11 “Previous contractor” is a newly defined term in the CLC. See CLC, s. 44(1), as amended by Bill C-39, s. 310(1).
12 CLC, s. 44(1), as amended by Bill C-39, s. 310(2).
13 CLC, s. 44(1), as amended by Bill C-39, s. 310(4).
14 CLC, s. 34(2), as amended by Bill C-39, s. 307(1).
15 CLC, s. 34(2), as amended by Bill C-39, s. 307(1).
16 CLC, s.80(1), as amended by Bill C-39, s. 321.
17 CLC, s. 80(2), as amended by Bill C-39, s. 321.
18 CLC, s. 35.1(1), as amended by Bill C-39, s. 308.
19 CLC, s. 239(15), as amended by Bill C-39, s. 357.
20 CLC, ss. 251.04(1) and 251.07(1), as amended by Bill C-39, ss. 348-349.
21 CLC, s. 251.07(4), as amended by Bill C-39, s.
22 CLC, s. 251.13, as amended by Bill C-39, s. 350(1).
23 CLC, s. 251.13, as amended by Bill C-39, s. 350(1).
24 CLC, s. 251(131)(1), as amended by Bill C-39, s. 351.
25 CLC, s.251.15(1.2), as amended by Bill C-39, s. 352(1).
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