Bill C-39: Proposed changes to collective bargaining and dispute resolution for federally regulated employers

On September 21, 2026, the federal government introduced Bill C-39, the Building Canada Strong Act (the "Bill"). Part 3 of the Bill proposes amendments to Part I (Industrial Relations), Part III of the Canada Labour Code (the "Code") and to the Wage Earner Protection Program Act.

Building on Employment and Social Development Canada ("ESDC") consultations earlier this year and the 2025 report of the Industrial Inquiry Commission on West Coast Ports, the proposed amendments represent some of the most significant changes to the federal labour relations framework in recent years. Among other changes, the Bill would revise the federal government's powers to intervene in certain labour disputes, create a special mediator process, require earlier bargaining in certain circumstances, extend the conciliation period and expand certain workplace protections.

On October 8, 2026, the Bill completed its second reading and is now under committee review in the House of Commons. At the same time, a special Senate committee, established specifically to study the Bill, is conducting its own review, an uncommon process for non-budget legislation that underscores the Bill’s significance. As the Bill progresses through Parliament, it may be subject to amendments.

How Bill C-39 would change ministerial intervention under section 107

Bill C-39 would introduce a more structured framework for ministerial intervention under section 107, establishing new conditions for directing the CIRB to intervene in an ongoing labour dispute. Currently, section 107 of the Code grants the Minister broad authority to take such measures as the Minister considers necessary to maintain or secure industrial peace and promote conditions favourable to the settlement of disputes, including by directing the Canada Industrial Relations Board (the "CIRB") to act.

Historically, this power was used sparingly. However, in recent years, it has increasingly been relied on to bring strikes and lockouts to an end and refer outstanding issues to binding arbitration, while questions about the validity of those directions have been left to the Federal Court and remain unresolved.

This trend is consistent with the CIRB’s experience with section 107 of the Code. In the first recent instance where the Minister exercised this intervention power in the case involving the Canadian National Railway Company, the CIRB addressed the issue as follows:

“[3] These ministerial instructions are unprecedented in that, by exercising his discretionary powers under section 107 of the Canada Labour Code (the Code), the Minister has effectively ordered the Board to end strikes or lockouts and to impose binding arbitration to settle the terms of collective agreements.

[…]

[43] Section 107 of the Code has been used sparingly over the past 20 years. The Board’s records indicate that ten referrals have been made under this section since 1984 (not including the two referrals that are the subject of this decision).”

In our recent work supporting employers at the bargaining table in Montréal, we have also seen first-hand how the prospect of a section 107 intervention has become a live consideration that shapes how both parties approach negotiations.

A new special mediator process

Bill C-39 would create a new special mediator process intended to help parties resolve outstanding issues before a legal strike or lockout begins. The Minister could appoint a special mediator no later than 75 days after a conciliation officer is appointed. The special mediator would have a 21-day mandate to help the parties narrow the issues and reach a settlement. If no agreement is reached, the special mediator would report to the Minister on the issues in dispute, the parties' positions and participation, and the likelihood of a negotiated settlement.

Absent an agreement, the report would be made public after five days. The appointment would not suspend the right to strike or lockout, but is designed to occur before a legal work stoppage begins, offering the parties a time-limited opportunity to resolve outstanding issues in hopes of preventing a strike or lockout whenever possible.

A revised framework for intervention

The Bill would replace the current wording of section 107 with a more structured framework. The Minister could only direct the CIRB to act once a strike or lockout has begun, and only after considering the special mediator's report and forming the opinion that the dispute adversely affects, or may adversely affect, the national interest.

In making that assessment, the Minister may consider the dispute's impact on the Canadian economy, any serious social disruption and the impact of a direction on freedom of association, informed by a national impact assessment prepared by ESDC. Where these conditions are met, the Minister could direct the CIRB to order the resumption of operations, extend the existing collective agreement on an interim basis, or impose a binding method of resolving the issues in dispute.

While the revised framework provides greater clarity and predictability regarding the government’s intervention powers, it would also narrow the circumstances in which intervention is available. For instance, the Minister would no longer be able to act before a work stoppage begins, and intervention may not be available at all where a special mediator was not appointed within the prescribed timeline. Therefore, employers in sectors where a work stoppage could have broader consequences should factor these steps into their contingency planning.

The Bill has been met with considerable controversy and criticism from unions nationwide. Critics claim it would give the Canadian government unprecedented authority to intervene in strikes compared to other G7 countries. In response, labour leaders and union members have organized protests in cities across Canada, asserting that Bill C-39 threatens to weaken workers’ right to strike.

How would Bill C-39 change collective bargaining and dispute resolution?

Bill C-39 would change when bargaining begins, how long conciliation lasts and how certain labour disputes are addressed. Recognizing that most federal disputes are resolved without a work stoppage, the government has focused on adding tools for the smaller number of bargaining relationships that remain difficult to resolve.

Earlier bargaining for high-risk relationships

Bill C-39 would require certain parties to begin bargaining between 200 and 180 days before their collective agreement expires. This would apply where the collective agreement has a term of five years or more, was reached following a strike or lockout, or resulted from an imposed binding dispute-resolution process.

Currently, the Code leaves the timing of bargaining largely to the parties, with notice to bargain generally given within the four months before a collective agreement expires. Under the proposed new section 50.1, the parties would also be required to notify the Minister and the CIRB and to engage with the Federal Mediation and Conciliation Service (the "FMCS"). Of note for employers, the statutory freeze on terms and conditions of employment would be triggered as of the 200th day before expiry.

A longer conciliation period

Bill C-39 would extend the conciliation period from 60 to 90 days for all parties subject to Part I of the Code. This would delay by 30 days the point at which a legal strike or lockout may begin, giving the parties more time to reach a negotiated settlement.

Post-dispute remediation

Bill C-39 would make post-dispute mediation mandatory in certain circumstances. Relationship-building support following a dispute is currently available through the FMCS, but it is not required under the Code. Under the Bill, where a collective agreement is reached following a strike or lockout, or a binding method of resolution has been imposed, the Minister would be required to appoint a mediator within six months to help the parties repair their relationship before the next round of bargaining.

First collective agreements

Bill C-39 would replace the Minister's discretion to refer first collective agreement disputes to the CIRB with a more structured, party-driven process. Once a union is certified, the FMCS would engage with the parties to help them conclude a first agreement.

If no agreement has been reached nine months after notice to bargain is given, either party could apply to the CIRB, which would generally be required to direct a binding method of resolution. The right to strike or lock out would be suspended once such a direction is made.

How would Bill C-39 change workplace protections for federally regulated employees?

Bill C-39 would significantly expand successorship protections where services are retendered and clarify paid medical leave provisions. Under a new contractor succession framework, where a new contractor replaces a previous contractor providing the same or substantially similar services at an airport or in a prescribed industry, bargaining rights, collective agreements and pending CIRB proceedings would follow the work. The existing wage-rate protections in section 47.3 of the Code would be repealed, and additional industries could be prescribed by regulation.

In response to concerns raised by employers during previous consultations, the Bill would amend the paid medical leave provisions in Part III of the Code to clarify that the current entitlement of up to ten days is a minimum standard. It is not an additional benefit that must be provided on top of equivalent or greater leave already negotiated through collective agreements.

What federally regulated employers should consider now

Although the Bill remains subject to change, federally regulated employers with bargaining or contracting decisions on the horizon should consider:

• accounting for the special mediator timeline and the longer conciliation period in bargaining and contingency planning;
• reviewing collective agreement expiry dates, terms and bargaining history to determine whether the early bargaining requirements could apply to them;
• assessing upcoming retendering plans for airport and other contracted services; and
• reviewing collective agreement leave provisions against the proposed paid medical leave changes.

We will continue to monitor the progress of Bill C-39 and provide updates as it moves through Parliament. If you have questions about how the proposed changes may affect your organization, our Labour & Employment team is available to assist.

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