By David Doorey, Professor of Law, York University
The federal Liberals introduced Bill C-39 yesterday afternoon, the much-anticipated omnibus law with the catchy title, An Act respecting certain measures to strengthen the economy. It’s a doozy and I’m glad I don’t have to carry around a hard copy. I won’t pretend to have read the entire Bill, which runs some 232 pages and 360 sections spanning three Parts each with multiple divisions.
I’ll focus on just one Part here: Part 3, Division 1, which introduces a bunch of revisions to the collective bargaining provisions in the Canada Labour Code. There’s a lot of changes to the CLC buried in the Bill. The part that will (and already has) attracted the most attention and criticism from the labour movement is the Liberal’s decision to double-down on the controversial use of Section 107 to end strikes by “email fiat”, as I have described the model. Basically, a single Minister, without need to debate the question in parliament, can just shoot off an email to the CIRB and order it to end the strike and impose arbitration.
No other government ever thought to use Section 107 in this manner, because it was clearly not intended to be used in this manner. Between 2024 and 2025, the Liberals used it to end work stoppages involving airlines, railroads, ports, and Canada Post. These disputes were caused by a range of factors, including attempts by workers and their unions to catch-up on wages that have trailed inflation. In every instance, except at Canada Post (the only dispute in which the employer did not want arbitration), the Liberals ordered the CIRB to impose binding arbitration. Those Section 107 orders and the CIRB decisions following through on them are now the subject of multiple Charter challenges before the courts.
Meet the New Section 107, Same as the Old Section 107
Bill C-39 leaves in place the existing language in Section 107, which empowers the Minister to “take any measure” they think “is likely to maintain or secure industrial peace and to promote conditions favourable to settlement of industrial disputes.” I argued previously that the evidence between 2024-2025 demonstrated clearly that this condition will virtually never be satisfied if we are being honest. That’s because in no case—not one—did the use of Section 107 “promote conditions favourable to settlement” of disputes.
In the case of the railways and ports, the use of Section 107 resulted in imposed agreements against the strong resistance of the unions. Forced binding arbitration has never in history promoted conditions favourable to settlements, it just pisses off one or both parties and then makes the parties reluctant to bargain fully next time because of the expectation of government intervention again. At Westjet and Air Canada, it was the workers’ defiance of the government’s use of Section 107 to ban the strikes that led to a settlement. Again, show me the evidence that the use of s107 by a single Minister to impose arbitration has promoted conditions “favourable to settlement”. There’s none.
But apparently, we are all to just ignore that little bit of Section 107 and pretend that handing out s107 orders right and left promotes settlements. In the revised 107, the Liberals have added some criteria that the Minister must consider before making the s107 order to end a work stoppage. Those criteria are as follows:
2) If a strike or lockout not prohibited under this part occurs, the Minister may direct the board under subsection (1) to make an order providing for the resumption or continuation of the employer’s operations or of the employer’s duties of employment, extending the term of the collective agreement between the parties, or imposing a binding method of resolving the issue in dispute only if
(a) the Minister has considered the special mediator’s report referred to in subsection 87.01(2); and
(b) the Minister is of the opinion that the strike or lockout that is underway adversely affects or may adversely affect the national interest.
(3). For the purposes of paragraph (2)(b), the Minister may take into account any relevant considerations, including
(a) whether the strike or lockout has or may have any significant impact on the Canadian economy;
(b) whether the strike or lockout is causing or may cause any serious social disruption;
and (c) whether the Minister’s direction to the Board has any impact on the freedom of association.
The key restraint imposed here is the requirement for the Minister to have appointed a “special mediator” to consult and assist the parties and then to have “considered” the mediator’s report. The power to appoint a special mediator is found in a new Section 87.04 and the government’s stated goal is that the mediator will issue the report and that the report be made public all before the parties can legally strike or lockout (s. 87.03). The Liberals are drawing on an old idea of Mackenzie King here, who believed that the weight of public opinion would be force the parties to be reasonable in their bargaining positions if only the public knew what was going on. There’s little evidence that strategy worked in practice.
Note the use of discretionary language throughout the new section. The Minister must “consider” the mediator’s report, not follow its advice; the Minister “may take into account” the factors listed in subsection (3), but isn’t required to. All that matters in the end is “the Minister’s opinion.” So, the Minister’s power remains unchecked. All they need to do is demonstrate that they “considered” the criteria. Recall the Canada Post situation. The Liberals appointed Bill Kaplan to a role similar to what a special mediator will do. Kaplan recommended against the government imposing arbitration. Under the new law, the Minister could ignore Kaplan’s advice and impose arbitration anyways.
Ultimately, whether the government can continue to end work stoppages via s 107 email fiat to the CIRB will be determined by the courts and Charter litigation. Nothing in the new revisions change that legal reality. Even before the new “criteria”, the government argued it considered the factors listed in the new subsection (3). Writing them down doesn’t change the calculus.
A Model of Responsive Collective Bargaining Intervention
I will note a few other notable parts of Bill C-39 quickly. The Bill introduces new measures for troubled labour relations workplaces. These workplaces are those in which the collective agreement was settled by imposition of binding arbitration or following a work stoppage. This is a strategy recommended in some “reflexive law” or “responsive law” models, whereby governments create two tracks of regulation: one for low-risk actors and one for high-risk actors. Here the idea is that past behaviour predicts future behaviour, so if the parties have failed to reach voluntary settlements without a work stoppage in the past, they are at high risk of failing to do so again.
In cases of high-risk relationships, Bill C-39 imposes two new innovations. The first is early, mandatory government conciliation. This model appears in a new s. 50.1 of the CLC. In those cases, the parties must begin renewal collective bargaining starting between 200-180 days before the end of the expiring collective agreement. At the same time, they must advice the government and a conciliator is sent out to meet with the parties for at least 90 days. During this window, the government can also appoint that “special mediator” I mentioned above. The idea here is that early mediation and third-party intervention might increase the chance of the parties reaching a negotiated settlement in workplace with a troubled labour relations history.
The second way the new law deals with high-risk relationships is by introducing a new “post bargaining mediation” system, whereby a third-party mediator is injected into the relationship to meet with the parties for the purpose of assisting the parties in improving their relationship (new s. 105.1). That job will take some skilled mediators to pull off.
Successorships in Transfer of Contractors
There are some definite “wins” for unions in Bill C-39 too. One is new language that requires a new contractor at some federal workplaces to inherit a collective agreement between a union and the previous contractor that held the contract for the work (new s. 47.3). I read this quickly, but I think the main change is that right now, the new contractor is only required to pay wages not less than what the workers were paid under a collective agreement in place at the previous contractor (see s. 47.3(2)). The new law would change this by expressly requiring that the collective agreement flow to the new contractor: “the new contractor is bound by any collective agreement that is, on the date of succession, applicable to the employees of the previous contractor”.
First Contract Arbitration
It’s useful to remember that sometimes it is unions that want imposed binding arbitration. That is often the case, for example, in first collective agreement situations. It is difficult to build a brand new collective bargaining relationship from scratch and newly unionized employers often strongly resist language that limits their discretion. Bill C39 as drafted removes the discretion of the CIRB and requires it to order binding arbitration whenever either the employer or the union requests it (new s. 80): “if a party applies to the board under subsection one, the board must by order direct a binding method of resolving the issues that remain in dispute between the parties.”
Wrap Up
There are other changes to the CLC in the Bill as well, but I have described the big points. From my perspective, there’s nothing revolutionary here. The fact that the Liberals have doubled-down on Section 107 is surprising, because it will infuriate the labour movement and there’s little benefit in keeping it. The government could always end strikes in key industries simply by passing back to work to legislation, as governments have done regularly for decades. Either the law passes Charter muster or it doesn’t. All the Liberal’s Section 107 does is bypass parliament and the democratic process of debating a Bill to achieve the same result slightly quicker. It’s a very cynical tool and there’s a very good chance that in any given case the government’s act of ending a strike by legal force will be struck down by the courts in a Charter challenge. Nothing in Bill C39 changes that fact. If I were the Liberals, I would have just left Section 107 untouched and said that whether the section is used in the future will be considered on a case-by-case basis and considering the outcome of the ongoing Charter litigation.
The new mandatory conciliation processes for troubled workplaces is an interesting idea and we should give it a chance to see how it works. Often it won’t work because the parties’ positions are entrenched and opposed, but dialogue is generally better than no dialogue. The improvements for unions in first contract arbitration and contractor successorships won’t have huge impact, but it is no doubt an effort by the Liberals to show that there was a “balance”.
Finally, note what Bill C39 is not. It is not an attempt to envision or chart a way forward for major labour law reform in the 21st century. It only tinkers with the long-standing model on the periphery. It adopts a philosophy that labour rights are important but also sometimes an impediment to “building Canada”. That is not a great message for labour rights. There is nothing in the Bill that emphasizes the importance of ensuring that workers share in whatever new economic direction the country takes. There’s nothing about ensuring labour is at the table in major economic decisions. Nothing about the need to consider new labour law models that facilitate greater worker voice. This is not a visionary law about the future of work in Canada. It is a huge Bill, but it offers virtually nothing in terms of thinking about an effective 21st century labour law for Canada.