Canada: Bill C-39 Proposes Significant Changes to Collective Bargaining in the Federal Sector

On September 21, 2026, the federal government introduced Bill C-39, the Building Canada Strong Act. Among its workforce-related measures, the bill proposes substantial amendments to the Canada Labour Code (“Code”) that would reshape several aspects of the federal labour relations framework, including collective bargaining timelines, first collective agreement negotiations, successor rights in prescribed contractor-replacement situations, multi-employer bargaining, special mediation, section 107 interventions, and paid medical leave. The bill is currently at First Reading and has not yet been enacted.

Key amendments are discussed below.

Earlier and More Structured Collective Bargaining

One of the most notable proposals in Bill C-39 is the creation of a new bargaining framework that would require certain parties to begin negotiations significantly earlier than has traditionally been the case.

Specifically, a new section 50.1 would establish mandatory bargaining obligations for collective agreements that:

• Were imposed through a binding dispute resolution process;
• Followed a strike or lockout; or 
• Have a term of five or more years. 

Under the proposed framework, parties to such agreements would be required to commence bargaining between 200 and 180 days before the agreement’s expiry. The legislation would also require notification to the Minister and the Canada Industrial Relations Board (CIRB), participation by the Federal Mediation and Conciliation Service (FMCS), and compliance with an earlier statutory freeze on terms and conditions of employment.

These proposed changes appear intended to encourage engagement between bargaining parties well before the expiration of a collective agreement. Rather than concentrating negotiations immediately before a potential strike or lockout, Bill C-39 would create a longer and more structured bargaining period and would bring mediation resources into the process at an earlier stage.

Proposed Changes to First Collective Agreements

Bill C-39 would also significantly strengthen the framework governing the negotiation of first collective agreements.

Under the proposed amendments, a newly certified bargaining agent would be required to provide its certification order to the Minister, and FMCS would be required to engage the parties in an effort to achieve a first collective agreement. More significantly, where the parties do not reach a first collective agreement within nine months after bargaining begins, either party would be permitted to apply to the CIRB for an order that the contract be settled outside of direct negotiations. The CIRB would then be required to order a binding method of resolving any remaining issues. During that process, strike and lockout rights would be suspended.

The proposed reforms suggest a legislative objective of reducing situations in which newly certified bargaining units remain without a collective agreement for extended periods. If enacted, the amendments would substantially enhance the available mechanisms for moving first contract negotiations toward resolution.

Expanded Successor Rights for Contractor Changes

Among the most significant proposals are amendments that would expand the application of successor rights.

Historically, successor rights under the Code have generally been associated with the sale of a business. Bill C-39 proposes to extend those protections to prescribed contractor-replacement situations. The bill would create the concepts of a "previous contractor" and a "new contractor" and would permit bargaining rights and obligations to continue where specified contractor transitions occur. Existing collective agreements, certification rights, pending certification applications, and ongoing proceedings could continue despite a change in contractors.

A Proposed Multi-Employer Bargaining Framework

Bill C-39 would also grant the CIRB new authority to certify a trade union as bargaining agent for existing bargaining units across multiple employers in specified industries and geographic areas. 

The proposed framework would permit certification on the application of two or more employers, on referral by the Minister of Labour, or on the CIRB's own initiative. The bill specifically contemplates its use in longshoring as well as other industries that may be designated by regulation in the future.

If enacted, this proposed amendment would create a mechanism for broader bargaining structures within designated sectors, on employer initiative.

A New Special Mediation Process

The bill would create a new special mediation process that can be used after conciliation begins.

Under the proposed amendments, the Minister could appoint a special mediator to help the parties resolve their dispute. The mediator could also prepare a report summarizing the issues, the parties’ positions, their participation in the process, the likelihood of settlement, and any recommendations for resolution.

Ministerial Ability to End a Work Stoppage

The bill would amend section 107 of the Code, which currently allows the Minister to refer a dispute or related matter to the CIRB and direct the Board to take measures considered necessary to maintain or secure industrial peace. This section has historically been used to end contentious work stoppages in the federal sector and return the parties to work. Bill C-39 would codify the circumstances in which the Minister’s powers under section 107 could be exercised and limit the exercise of this authority only to circumstances where there is an ongoing strike or lockout, not prior. If Bill C-39 is enacted, the Minister would also have to consider a special mediator’s report, discussed above, before using section 107 in circumstances involving a strike or lockout that may affect the national interest.

Proposed Changes to Paid Medical Leave

Bill C-39 also proposes an amendment to the paid medical leave provisions of the Code.

The legislation would provide that the statutory paid medical leave provisions in Division XIII of Part III would not apply where a collective agreement confers rights and benefits that are at least as favourable as those provided by the Code.

This proposal would bring the federal framework closer in line with approaches found in several provincial employment standards statutes, where collectively bargained entitlements can replace statutory minimum standards if they are at least as beneficial to employees. It would also foreclose arguments that statutory paid medical leave benefits constitute an additional entitlement beyond collectively bargained benefits.

Enhanced Enforcement of Wage Theft and Misclassification Issues

The federal government’s background materials introducing Bill C-39 also signaled the government’s intention to increase enforcement of wage theft and employee misclassification, particularly in the trucking industry. It notes that misclassified drivers may be denied Code protections and that non-compliant practices can create unfair competition by disadvantaging employers that comply with their labour standards obligations.

Employer Takeaways

Because Bill C-39 remains proposed legislation, federally regulated employers may wish to monitor its progress and consider the potential impact of its proposed amendments, including:

• Earlier bargaining timelines and statutory freeze obligations for certain collective agreements, namely, long-term agreements and agreements reached after a strike, lockout, or binding dispute resolution process;
• Expanded successor rights in prescribed contractor-replacement situations;
• New or expanded processes for first collective agreements, multi-employer bargaining, special mediation, section 107 interventions, and paid medical leave in unionized workplaces; and
• Increased enforcement attention on wage theft and employee misclassification, particularly in the trucking industry.