Canada’s proposed labour reforms could shift power away from workers in major disputes

The federal government’s newly tabled Bill C-39 would give Ottawa a more direct and explicit role in labour disputes in federally regulated sectors, changing how the government may respond to strikes and lockouts.

The labour provisions are part of a larger piece of legislation aimed at strengthening Canada’s economic resilience, protecting supply chains and supporting national projects.

The changes would apply to workplaces governed by the Canada Labour Code, which covers sectors that include railways, airlines, ports, telecommunications, postal services and banks, as well as other industries under federal jurisdiction.

The government has presented the changes as a way to reduce unnecessary intervention, but the legislation could instead make it easier for Ottawa to normalize and justify intervention in disputes collective bargaining is designed to manage.

The bill would codify and structure the federal labour minister’s authority under Section 107 of the Canada Labour Code to direct the Canada Industrial Relations Board to take action to prevent strikes and lockouts, including referring a dispute to binding arbitration.

That could alter the balance of bargaining power between unions and employers in federally regulated industries, particularly where workers’ ability to withhold their labour is their principal source of leverage.

A new intervention process The government has described the changes as “a guardrail” around the code’s controversial Section 107 .

Under the proposed framework , the labour minister could appoint a special mediator to assist parties that remain unable to reach a collective agreement.

The mediator would have 21 days to work with the union and employer before preparing a report outlining the issues in dispute and the likelihood of settlement.

The report would become public five days after being issued unless the parties reached an agreement in the meantime.

Before directing the Canada Industrial Relations Board to act under Section 107, the minister would have to consider the mediator’s report and determine whether intervention was in the “national interest.” The bill identifies factors that may be considered, including whether a strike or lockout would significantly affect the Canadian economy.

Mediation can play a valuable role in labour relations.

A skilled mediator can help parties identify areas of agreement and resolve disputes before they escalate.

But when mediation fails, the board could be directed to order workers back on the job, extend the terms of an expired collective agreement or refer unresolved issues to binding arbitration.