Since July 2023, the Minister of Labour (currently the Minister of Jobs and Families) has intervened in labour disputes under section 107 of the Canada Labour Code (the “Code”) on 10 occasions. The disputes included the West Coast ports, the ports of Montreal and Quebec, CN and CPKC, Canada Post, WestJet and Air Canada. In most cases, the Minister directed the Canada Industrial Relations Board (the “Board”) to send the dispute to binding arbitration.
After the economic disruption these disputes caused, employers have asked for clearer rules on how and when the government will intervene. The federal government responded with consultations that began on April 28, 2026.
On September 21, 2026, Bill C-39, the Building Canada Strong Act (the “Bill”), was introduced. Part 3 of the Bill seeks to amend the Code in several important ways.
At a high level, the most important aspects of the Bill include:
The Minister’s power under section 107 to order a return to work or impose arbitration applies once a work stoppage is underway, and only after a special mediator has reported and the Minister has formed the opinion that the stoppage affects the national interest.
The conciliation period increases to 90 days, and a special mediator can be appointed for 21 days within that period. The mediator’s report is made public before a strike or lockout can begin.
Parties whose last round of bargaining ended in a strike, lockout or imposed settlement, or whose collective agreement is for a term of five years or more, must begin bargaining 180 to 200 days before expiry of the agreement.
At airports, the union and collective agreement follow the work to the new contractor.
Unpaid Part III wage settlements can be enforced by order against the employer or its directors.
Unless otherwise noted, the Part I amendments take effect on royal assent.
Section 107 currently allows the Minister to direct the Board to do whatever the Minister considers necessary to secure industrial peace. The Bill adds conditions for the most consequential use of this power (Bill, s. 334; Code, s. 107).
Once a lawful strike or lockout is underway, the Minister may direct the Board to order a return to work, extend the collective agreement or impose binding arbitration only if:
In forming that opinion, the Minister may consider any relevant factor, including whether the strike or lockout has or may have a significant impact on the Canadian economy, whether it is causing or may cause serious social disruption, and whether the direction affects freedom of association.
It is important to note that this direction is available only once a work stoppage has started, and it depends on a special mediator’s report, which means a special mediator must have been appointed during conciliation.
The conciliation period that follows a notice of dispute increases from 60 days to 90 days (Bill, s. 318; Code, s. 73(2)). The 21-day cooling-off period after conciliation stays the same (Bill, s. 324; Code, s. 89(1)(d)).
During conciliation, and no later than day 75, the Minister may appoint a special mediator for 21 days (Bill, s. 322; new Code, Division V.01, ss. 87.01–87.04). If the parties settle, the process will end there. If they do not, the mediator reports to the Minister on various matters including the mediator’s recommendations. The Minister will give the report to the parties and make it public five days after the mediator’s mandate ends. If a tentative agreement is later rejected, the report is also made public.
The Bill states that special mediation is to take place before a strike or lockout can begin, with at least ten days between the public release of the report and any work stoppage. A key point is that the appointment of a special mediator does not suspend the right to strike or lock out.
New section 50.1 (Bill, s. 315; see also Code, s. 49(1) as amended by Bill, s. 314) applies to parties where:
For these parties, bargaining must begin between 180 and 200 days before the current collective agreement expires. The parties must notify the Minister and the Board of the date and location of the first meeting and engage the Federal Mediation and Conciliation Service (“FMCS”) after giving notice. The duty to bargain in good faith applies, and a breach is an unfair labour practice. Several other provisions now run from the 200th day before expiry for these parties, including the statutory freeze on terms and conditions (new s. 50.1(5)), the replacement worker rules (Bill, s. 327; Code, s. 94(4)), and the Minister’s power to order a final offer vote (Bill, s. 335; Code, s. 108.1(1)). The maintenance of activities agreement is due by the 185th day before expiry (Bill, s. 323; Code, s. 87.4(2)).
Where a collective agreement is reached after a strike, lockout, or imposed resolution, the Minister must also appoint a mediator within six months to help the parties improve their relationship, and the parties must meet with the mediator (Bill, s. 333; new Code, s. 105.1).
When a contract to provide services at an airport in the air transportation industry ends and a new contractor takes over the same or substantially similar services, the bargaining agent, the collective agreement and any pending Board proceedings carry over to the new contractor (Bill, s. 310; Code, s. 44, new ss. 44(1) definitions and 44(2.1)). The Governor in Council may extend this to other services, industries and locations by regulation as well (new Code, s. 44(4)).
Where an employer fails to pay a Part III wage settlement by the date specified in the settlement, the Head of Compliance and Enforcement may issue a settlement enforcement order against the employer or, where section 251.18 applies, against a director of the corporation (Bill, s. 349; new Code, s. 251.07). Directors remain liable for up to six months’ wages (Code, s. 251.18). The order carries an administrative fee of the greater of $200 and 15% of the amount owing (Bill, s. 351; Code, s. 251.131). The Head may also issue an order to a debtor of the employer on receipt of a complaint, before any payment order has issued, where the Head has reasonable grounds to believe the employer has failed or is likely to fail to pay (Bill, s. 350; Code, s. 251.13).
Division XIII of Part III does not apply in respect of medical leave of absence with pay to an employer and employees who are parties to a collective agreement that confers on employees rights and benefits that serve the same purpose as medical leave of absence with pay, that are at least as favourable in that regard as those conferred by that Division, and that also provides for the settlement of disagreements by a third party (Bill, s. 357; new Code, s. 239(15)). In that case, the collective agreement applies exclusively. This addresses the stacking question that has been open since the paid medical leave provisions took effect in 2022.
The Bill also allows either party to apply to the Board for binding resolution of a first collective agreement after nine months of bargaining (Bill, s. 321; Code, s. 80), allows employers, the Minister, or the Board to initiate geographic certification in longshoring and other designated industries (Bill, s. 307; Code, s. 34), and authorizes regulations on expedited grievance arbitration and administrative monetary penalties for bad faith bargaining (Bill, ss. 336–337; Code, ss. 111 and 111.01).
Bill C-39 is the government’s answer to several highly publicized issues with the Code in recent years. The Building Canada Strong Act as a whole is an economic package that touches many sectors and reworks the federal government’s regulatory practices to expedite projects and support the Canadian economy at a time of international tension. The Code amendments are in part a welcome addition for federally regulated employers. They also create new processes that will need careful navigation to ensure compliance.
If you have any questions regarding this article, please contact your Harris lawyer.
