Bill C-39: What Might Change for Employers Under Federal Jurisdiction?

On September 21, 2026, the federal government introduced Bill C-39, the Act respecting certain measures to strengthen the economy, known by its short title, the Building Canada Strong Act.

This extensive bill is primarily intended to expedite the approval of certain major projects and to strengthen the country’s trade corridors with the aim of ensuring economic predictability. In the same vein, it proposes substantial changes in the areas of labour and employment. Amendments to the Canada Labour Code (the “Code”) would have significant implications for collective bargaining, which directly affects businesses under federal jurisdiction, including ports, maritime, rail and air transportation, the banking sector, and telecommunications. The bill also includes certain provisions dedicated to protections for employees. Here, we outline the most significant proposed changes related to labour and employment.

Regulation of Labour Disputes: New Conditions for Ministerial Intervention

The proposed amendment that is currently generating the most reaction is undoubtedly the one concerning section 107 of the Code. This provision currently allows the minister of labour to refer a matter to the Canada Industrial Relations Board (the “Board” or “CIRB”) or to direct the Board to take the measures the minister deems necessary, particularly in the event of a labour dispute. In practice, it allows the minister to ask the Board to order an end to a work stoppage, whether a strike or a lockout, or to impose a binding arbitration award.

With this bill, the minister’s authority to direct the Board to issue an order providing for the continuation or resumption of operations is subjected to two preconditions that are not currently included in the Code.

Harm to National Interest: A Prerequisite That Must Be Met

The exercise of this authority would, first and foremost, be contingent upon the minister’s determination that the work stoppage is detrimental to the national interest. To that end, the bill lists certain factors that the minister may consider, namely:

• the significant actual or potential impact of the strike or lockout on the Canadian economy;
• serious social disruptions, whether actual or potential, caused by a strike or lockout;
• the implications of the decision for freedom of association.

Although these criteria are not currently included in the Code, the concepts of significant economic repercussions, public interest and an impact extending beyond the parties to the dispute have often been at the heart of debates surrounding the application of section 107 in recent years. For example, during the most recent labour dispute in the rail sector in August 2024, the immediate impact on trade amounted to several billion dollars because goods could not be transported to the United States.

The Involvement of a Special Mediator: A New Mandatory Step

The bill establishes the position of special mediator, which in itself constitutes a significant change. Appointed by the minister for a period of 21 days, the mediator’s role would be to outline the dispute and the respective positions of the parties, and to propose possible solutions with an aim of reaching a new collective agreement. They are expected to submit a report unless the parties have reached a collective agreement or an agreement in principle within those 21 days, and the minister must take that report into account before taking any action.

In practical terms, these requirements add formal steps to the process without depriving the minister of the authority to direct the Board to take the measures deemed necessary when an issue of national interest arises. Above all, the requirements are intended to provide stricter guidelines for how the process unfolds.

Collective Bargaining: What Other Changes Does Bill C-39 Propose?

Various other amendments to the Code are proposed, once again with the aim of making the bargaining process more efficient and avoiding certain conflicts that could disrupt industrial peace and economic stability. To that end, the bill proposes, among other things:

• Negotiations to begin earlier. The parties should begin negotiations six months before the collective agreement expires if the last round of negotiations resulted in a work stoppage or mandatory arbitration, or if more than five years have passed since the last collective agreement was concluded.
• Faster intervention by the Federal Mediation and Conciliation Service (FMCS), which should begin working with the parties as soon as it receives the accreditation order, with an aim of negotiating an initial collective agreement, and the possibility for a party to request that the Board apply a binding settlement method nine months after the date the notice of negotiation was sent.
• An extended conciliation period of up to 90 days, whereas the conciliator currently has a 60-day mandate, unless the parties agree to an extension.
• A system of administrative monetary penalties for bad-faith bargaining, applicable to both parties.
• An expedited grievance arbitration process, the procedures for which would be specified by regulation.
• Expanded access to geographic accreditation, the process for which may now be initiated at the request of at least two employers from the same industry and the same geographic region, upon referral by the minister or at the Board’s initiative, rather than solely at the request of a union.
• The retention of certain bargaining rights when changing providers in certain targeted sectors, particularly in the context of airport services. The bargaining agent, the applicable collective agreements and certain ongoing proceedings would thus be transferred to the new provider.

Paid Sick Leave: Is the End in Sight for the Duplication of Entitlements?

As of December 1, 2022, an employee in the private sector under federal jurisdiction is entitled to three days of paid medical leave after 30 days of continuous employment, followed by one additional day at the beginning of each month worked, up to a maximum of 10 days per calendar year. The bill clarifies that these provisions constitute a minimum threshold, not a benefit to be added to equivalent or greater leave already provided for in a collective agreement. Specifically, this amendment is intended to prevent a duplication of paid medical leave entitlements when the collective agreement already grants equivalent or greater entitlements. According to the bill, the collective agreement would then apply exclusively if it also provides for the resolution of disputes by a third party.

Employee Protection: Other Proposed Changes

The bill also includes certain amendments aimed at protecting employees. In particular, it includes amendments to the provisions of the Code relating to the collection of wages, as well as amendments to the Wage Earner Protection Program Act, which provides compensation to employees owed wages by an insolvent employer.

 Bill C-39: What Are the Next Steps for Employers?

Bill C-39 is currently under consideration by a parliamentary committee, and its content is likely to evolve as the legislative process unfolds, especially since the labour provisions are already drawing mixed reactions from labour and management actors, particularly with regard to the new conditions governing the minister’s authority to intervene under section 107 of the Code.

BCF will closely monitor the progress of this bill. Your business is under federal jurisdiction, and you are looking to better understand how these changes might affect you? Our Labour and Employment Law team remains available to assist you in analyzing the issues raised by the proposed amendments to the Code, particularly in preparing for your upcoming negotiations.