Summary
On September 21, 2026, the federal government introduced Bill C-39, An Act respecting certain measures to strengthen the economy. Among its many proposed changes, Bill C-39 would significantly amend the Canada Labour Code (the “Code”), introducing substantial changes to collective bargaining, dispute resolution, and employment standards enforcement for federally regulated employers. On October 8, 2026, Bill C-39 passed second reading in the House of Commons and was referred to the legislative committee for further study. This article provides an overview of the key proposed labour and employment amendments and highlights important considerations for federally regulated employers as Bill C-39 progresses through the legislative process.
Key Proposed Amendments
Earlier and More Structured Collective Bargaining
If passed, Bill C-39 would significantly reshape collective bargaining timelines by requiring parties in certain circumstances to begin bargaining much earlier than under the current framework. The proposed changes are intended to promote earlier engagement between employers and unions, provide additional opportunities for dispute resolution, and reduce the likelihood of labour disruptions as collective agreements approach expiry.
These early bargaining requirements would apply where the existing collective agreement:
- resulted from a binding dispute-resolution process, such as interest arbitration;
- was reached following a strike or lockout; or
- has a term of five years or more.
In these circumstances, collective bargaining would be required to commence between 180 and 200 days before the expiry of the collective agreement.
The proposed amendments would also impose additional obligations before bargaining begins. The parties would be required to provide notice to both the Minister of Labour and the Canada Industrial Relations Board (“CIRB”) of the first bargaining meeting, as well as engage with the Federal Mediation and Conciliation Service without delay.
The statutory freeze provisions prohibiting unilateral changes to terms and conditions of employment without the bargaining agent’s consent would also take effect 200 days before the agreement expires, substantially earlier than under the current regime. A maintenance-of-activities agreement, or an agreement that no maintenance of activities is required, must be reached by the 185th day before the expiry of the collective agreement.
Bill C-39 would also extend the statutory conciliation period from 60 days to 90 days.
If enacted, federally regulated employers may therefore need to begin bargaining preparation, operational planning, and labour-relations strategy significantly earlier than they do today.
New Special Mediator Process
If passed, Bill C-39 would also establish a formal special mediator process. This would expand the federal government’s role throughout parties’ collective bargaining process through the introduction of both pre-dispute and post-dispute mediation mechanisms.
Under Bill C-39, the Minister could appoint a special mediator to assist the parties during conciliation. This appointment can be made at any time, but no later than the 75th day of conciliation, and will last for a period of 21 days.
The special mediator would be meant to assist the parties in attempting to resolve their dispute and, where a collective agreement is not reached, to prepare a report identifying the outstanding issues, summarizing the parties’ positions, and providing recommendations. Subject to limited redactions, the special mediator’s report would subsequently become public.
The public release of the report would represent a notable departure from the current regime. Bargaining positions, key areas of disagreement, and the parties’ conduct during negotiations could become subject to increased public scrutiny, creating additional strategic considerations during collective bargaining.
The stated purpose of these amendments is to encourage mediation before a strike or lockout occurs and to provide a minimum 10-day period following the public release of the special mediator’s report before a strike or lockout may commence. However, the appointment of a special mediator would not suspend or otherwise affect the parties’ right to strike or lock out.
Bill C-39 would also introduce mandatory post-dispute mediation. Where a collective agreement is imposed through a binding dispute-resolution process or concluded following a strike or lockout, the Minister would be required to appoint a mediator within six months to assist the parties in improving their relationship.
Changes to Government Intervention
Bill C-39 would, if passed, establish a more detailed statutory framework governing the federal government’s ability to intervene in labour disputes.
The proposed amendments would permit the Minister to direct the CIRB to order an end to a strike or lockout, extend a collective agreement, or impose a binding dispute-resolution process only after considering the special mediator’s report as described above and determining that the labour dispute adversely affects, or may adversely affect, national interest.
In assessing the national interest, the Minister may consider factors such as:
- the impact of the dispute on the Canadian economy;
- the potential for serious social disruption; and
- the impact of government intervention on freedom of association.
These amendments appear designed to preserve the federal government’s ability to intervene in significant labour disputes while introducing greater structure and transparency to the exercise of that authority.
Expanded Access to First Contract Arbitration
Bill C-39 would make first contract arbitration more readily available, if passed.
Where a newly certified union and employer are unable to conclude a first collective agreement within nine months after notice to bargain is given, either party could apply to the CIRB for binding resolution of outstanding issues.
Once such an application is made, the Board would be required to direct a binding method of dispute resolution, and the parties’ right to strike or lock out would be suspended pending resolution of the dispute.
The proposed amendments would make first contract arbitration more accessible and predictable than under the current regime, potentially altering bargaining dynamics by providing a clearer path to mandatory dispute resolution where negotiations reach an impasse.
Additional Employment and Enforcement Amendments
In addition to the changes discussed above, Bill C-39 contains a number of other proposed amendments that would affect labour relations, compliance, and enforcement under the Code:
- Settlement enforcement. The proposed amendments would strengthen the mechanisms available to enforce settlements arising from wage complaints under the Code, including by expanding the tools available to recover outstanding amounts.
- Unfair labour practice complaints. The proposed amendments would authorize the development of measures aimed at addressing frivolous, vexatious, or bad-faith unfair labour practice complaints, including complaints brought by unions.
- Administrative monetary penalties. Bill C-39 would expand the government’s ability to establish administrative monetary penalties, including in relation to failures to comply with mandatory early bargaining requirements and certain forms of bad-faith labour relations conduct.
- Multi-employer bargaining units. The legislation would permit employers to seek the establishment of multi-employer bargaining units, which may be extended to new industries.
- Paid medical leave exemption. Bill C-39 would introduce a limited exemption from the Code’s statutory paid medical leave provisions for unionized employers. The exemption would apply where a collective agreement provides employees with leave-related rights and benefits that serve the same purpose as paid medical leave and are at least as favourable as those available under the Code. Where these conditions are met, the collective agreement provisions would apply exclusively, and the employer would not be required to comply with the statutory paid medical leave requirements under the Code.
Key Takeaways for Federally Regulated Employers
If enacted in its current form, Bill C-39 would represent one of the most significant reforms to the federal labour relations framework in recent years.
Although Bill C-39 remains subject to further parliamentary review and potential amendment, the introduction of this legislation signals a shift toward more structured collective bargaining processes, earlier engagement between bargaining parties, and a more defined framework for government intervention in labour disputes.
Federally regulated employers should therefore continue to monitor the legislation closely and begin assessing how the proposed amendments could affect collective bargaining strategy, labour-relations planning, and compliance obligations.
Need More Information?
For more information or assistance with Bill C-39, the proposed amendments to the Canada Labour Code, or their potential impact on your workplace, please contact Kathleen Kennedy at kkennedy@filionlaw.com or your regular lawyer at the firm.