Toronto, ON – September 30, 2026 – On September 21, 2026, the Government of Canada introduced Bill C-39, the Building Canada Strong Act. Among other measures, Bill C-39 proposes significant amendments to the Canada Labour Code (the “Code”) intended to modernize federal labour relations and strengthen protections for workers.
The proposed amendments are relevant to federally regulated employers, including those operating in banking, telecommunications, interprovincial and international transportation, ports, railways, and air transportation. Bill C-39 remains before Parliament and may be amended before enactment.
Proposed Changes
1.Earlier Intervention in High-Risk Bargaining
One of the Bill’s primary goals is to reduce lengthy labour disputes by encouraging earlier government involvement in challenging bargaining relationships.
Bill C-39 would introduce earlier, more structured intervention in bargaining relationships identified as high risk, expand mediation and dispute-resolution supports, and reinforce good-faith bargaining obligations. The proposed changes include:
- an obligation to begin collective bargaining between 200 and 180 days prior to the collective agreement expiry in specified high-risk circumstances with the support of federal mediators;
- an extension of the statutory conciliation period from 60 days to 90 days;
- a relationship-building process with the Federal Mediation and Conciliation Service (“FMCS”) within six months of reaching a collective agreement where there was an imposed arbitration or strike/lockout; and
- a Special Mediator process to assist the parties during the extended conciliation period and report publicly to the Minister.
A bargaining relationship would be treated as high risk where the previous bargaining cycle ended in a work stoppage or imposed arbitration, or where the parties have not negotiated a collective agreement for 5 or more years.
2.New Labour-Relations Mechanisms and Potential Enforcement Consequences
Bill C-39 would also introduce or authorize several additional labour relations mechanisms that would:
- establish a geographic-certification process covering two or more federally regulated employers in designated industries and geographic areas;
- authorize regulations establishing expedited grievance arbitration;
- strengthen support for first collective agreements by requiring the parties to work with the FMCS throughout negotiations and permitting an application to the Canada Industrial Relations Board (“CIRB”) by either party for binding resolution if no agreement is reached after nine months; and
- extend successor-rights protection in airports and specified industries, where a new contractor who succeeds a previous contractor will assume the trade union relationship.
3.A Narrower Framework for Ministerial Intervention
The Bill would significantly revise the Minister’s authority to intervene in major labour disputes.
At present, section 107 of the Code currently permits the Minister to direct the CIRB “to do such things as the Minister deems necessary” to maintain or secure industrial peace and promote conditions favourable to the settlement of industrial disputes. Bill C-39 would replace that broad discretion with a more structured process.
Under the proposed framework, the Minister could consider exercising the revised authority only after:
- a Special Mediator has been appointed and completed their mandate;
- the Special Mediator has submitted a public report to the Minister;
- the Minister has considered that report; and
- the Minister is of the opinion that a strike or lockout would have a significant national impact (i.e. whether there would be a significant impact on Canadian economy and serious social disruption alongside the effect of a direction on freedom of association).
If those conditions are met and a work stoppage has begun, the Minister’s direction to the CIRB would be one or more specified responses: ordering the resumption of services, extending the terms of an existing collective agreement on an interim basis, or establishing a binding dispute-resolution mechanism.
Proposed Special Mediator Process
The proposed framework would require the Minister to consider the Special Mediator’s public report before exercising the revised section 107 authority. The report would address the issues in dispute, the parties’ positions and participation in the process, and the prospects of reaching a negotiated settlement within a reasonable period.
If the parties do not conclude a collective agreement, the Special Mediator’s report, including any views and recommendations, would be made public five days after it is provided to the Minister.
The report would also be made public if the Special Mediator assists the parties in reaching a tentative agreement that is subsequently rejected.
Although the process would take place during conciliation, it is intended to occur before a legal strike or lockout can begin.
4.Paid Medical Leave: Minimum Floor, Not Cumulative Entitlement
Bill C-39 would amend the paid sick leave provisions. The proposal would treat the statutory entitlement as a minimum floor rather than an additional benefit on top of existing sick leave plans.
For unionized workplaces, this means that where a collective agreement already provides paid medical leave that is at least as favourable as the statutory entitlement, employees would not receive a duplicate benefit under the Canada Labour Code.
In those circumstances, disputes relating to paid medical leave would be governed exclusively by the collective agreement.
Key takeaways for employers
- Plan for earlier intervention in high-risk negotiations. Employers facing potentially difficult negotiations should expect earlier engagement with federal mediators and a longer conciliation process. Maintaining a clear and organized bargaining record will become increasingly important.
- More pressure to settle before a work stoppage. The Minister could appoint a Special Mediator and a public report could follow, which may create additional pressure to settle the dispute in advance of a strike or lockout.
- Review paid medical leave against the statutory floor. Employers should compare collectively bargained and employer-provided medical-leave benefits with the statutory requirements. The stated proposal is to avoid duplicate paid-leave entitlements where the existing benefit is equivalent or more favourable.
Bill C-39 appears aimed at reducing lengthy labour disruptions in federally regulated industries through earlier intervention, enhanced mediation, and increased use of arbitration. While employers may welcome the paid medical leave clarification and clearer government powers to address nationally significant work stoppages, some may be concerned about the proposed first contract process and the potential implications for longer-term collective agreements.
Protea LLP will continue to monitor Bill C-39 as it moves through the legislative process. If you have questions about how the proposed changes may affect your organization, bargaining strategy, collective agreements, or workplace policies, we are here to help.
