The Carney government’s introduction of the Building Canada Strong Act aims to reform the Canada Labour Code, moving away from adversarial dispute resolution towards a more structured mediation process.
in Domestic Policy, Latest News, Columns, In the Media, Intergovernmental Affairs, Justice, Social Issues, Peter Copeland
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In The Hub Canada, I argue that the federal changes to the labour code in Bill C-39 are a step in the right direction, but they could still consider sector-specific dispute resolution mechanisms to provide greater predictability and do more to ward off the threat of disruptions and strikes.
Conservatives should push for further reforms, recognizing that labour organizations are a mediating institution par excellence, anchoring communities and a form of subsidiarity that can shrink the scope of big and unwieldy government.
Properly understood, labour organizations are mediating institutions giving workers meaningful agency closer to their workplaces than the state—a function lost as provincial and federal legislation has usurped some of the health, insurance, and workplace safety negotiating functions with overbroad legislation in the past century. The growth of provincial and federal labour law is another chapter in the long growth of government at the expense of more local mediating institutions.
But it is stronger local institutions who better serve their constituents: they are closer to the ground, have the incentives and knowledge needed to tailor rules and norms to workers’ needs, and do so in an environment that does not involve the zero-sum class conflict environment or political posturing of threatening strikes or union busting.
Conservatives looking to support local mediating institutions like labour organizations could build upon these reforms by advocating for stronger worker-controlled benefit organizations, expanded employer- and union-led training, and workers-council style labour management committees that give employees a regular voice in workplace decisions
The benefit of initiatives like these is that they align incentives between labour and management. The support of ongoing upskilling through union-led training is that firms become more productive and the existing workforce retains and enhances its long-term job security. This is the kind of positive-sum approach to strive for in labour reform.
This article originally appeared in The Hub.
By Peter Copeland, September 25, 2026
With the introduction of the Building Canada Strong Act, a bill that includes an overhaul of parts of the Canada Labour Code, the federal government has seized an opportunity to move labour law beyond the adversarial settlement inherited from the age of mass industrial conflict.
The bill adds a new special-mediator process and clearer guardrails around section 107 (the section outlining the minister’s powers in an industrial dispute), including a requirement that work stoppage pose a “significant adverse national impact” before Ottawa can step in. These are positive changes, but even more can be done to reform Canada’s outdated and unpredictable labour policy.
The government should consider supplementing the proposed national-impact test with sector-specific rules for recurring disputes in critical national networks. Additionally, policymakers should push for more fulsome labour reform by strengthening the training and governance opportunities through employer-led training or workers’ councils that are the hallmarks of a healthier labour force—anchors of communities and mediating institutions that are better than big government.
Other positive models exist throughout the Anglosphere and in several countries across Europe. Germany, for example, combines world-class innovation and competitiveness in auto manufacturing with workers’ councils that give workers an ongoing voice in workplace governance and continuous upskilling to keep the labour force and their firms productive.
Ottawa need not look overseas for every answer either. Existing provincial solutions don’t fall afoul of the constitutionalized “right to strike” precedent (set in a case of infamous judicial activism) and preserve strong worker representation and bargaining power without jeopardizing the delivery of important services or perpetuating economic uncertainty.
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With external pressure from the U.S. shining a light on our economic stagnation, federal and provincial governments have public support to enact major reforms. At the same time, federally regulated private sector and provincial public sector unions have a unique capacity to withhold services on which large sections of the population depend. Reform is crucial for Canada’s broader economic success.
Cases of delayed services have been especially prevalent in federally regulated sectors. Canadians have endured high-profile disputes at railways, ports, airlines, and our postal service. As John Ivison recently noted, OECD data from the mid-2000s places Canada behind only France and Belgium for work stoppages.
Statscan figures recently confirmed the issue. Canada lost 6.6 million person-days due to labour disputes in 2023 alone, the highest since 1986. A good deal of that spike comes from education, health and social services, and public administration—sectors where strike action is most common.
Much of Canada’s labour law failures consist in our approach to dispute resolution, which is counterproductive in sectors like these across the provinces, and is especially so at the federal level.
Until now, in sectors governed by the Canada Labour Code, once disputes break down, the process leads to a strike or requires the use of a broad ministerial power in section 107 of the code that has only recently been used once disruption has begun or is imminent. It has generally functioned as a reactive tool. When this happens, the result is a guaranteed ratcheting up of tensions between workers, the employer, and the broader government that lasts well beyond the resolution of the dispute.
In this process, the issues tend to become political fights waged in the media. Worse still, the prospect of eventual government intervention can distort bargaining itself, a concern shared by labour and management. In the summer consultations on labour code reform, unions shared that employers may hold out for rescue under section 107. Employers lamented the reactive nature of the provision, calling for earlier dispute-resolution tools.
Absent any threshold-based alternatives to end disputes, the section 107 power is problematic because it allows intervention whenever “deemed expedient” to secure “industrial peace,” without clear direction telling either side when intervention will occur.
The government’s new bill partly addresses this reactive character of federal labour law; the new special-mediator process allows for a public report on the outstanding issues and prospects for a settlement. The minister then must decide whether the work stoppage would have a “significant adverse national impact.” Only once a stoppage begins can the minister direct the Canada Industrial Relations Board (CIRB) to resume operations or establish a binding dispute-resolution mechanism such as arbitration.
The government suggests it will be more complicated to intervene given the process it adds on through the mediator’s report. The changes provide some clarity, but it could be more predictable still. Specifically, the federal government need not rely on the same general ministerial national-impact test for every industry.
Parliament could preserve section 107 following a special-mediator report when need be, but put forward sector-specific dispute resolution criteria for rail, ports, aviation and other critical national networks to provide alternative and more sustainable means of resolution than the strike.
Beneath all these technical aspects of labour law is also the rights-based question of the right to strike. As the government took pains to say in the announcement of the bill, “Changes to the Canada Labour Code will strengthen collective bargaining by helping parties address issues earlier, reach negotiated agreements, and resolve disputes while fully protecting the right to strike.”
The spectre of judicial activism, and an expansive concept of a constitutional right to strike, haunts efforts at substantive labour reform. However, the jurisprudence in labour provides a clue to a better path forward.
The infamous 2015 Saskatchewan Federation of Labour case is in fact narrower than often portrayed. In the ruling, Justice Abella controversially derived a right to strike from section 2 (d)’s sparse guarantee of “freedom of association,” in the Canadian Charter of Rights and Freedoms, despite the fact that those words didn’t make it into the Charter’s text.
At issue in the case was the Saskatchewan government’s attempt to legislate limitations on the ability of public sector employees who perform essential services to strike. However, it was not the strike-limiting feature of Saskatchewan’s scheme that was deemed problematic. It was its “overbreadth,” failing at the “minimal impairment” stage of proportionality analysis because it removed bargaining leverage more than necessary and did not contain dispute resolution alternatives outside of a strike.
In the same opinion, Abella and assenting justices wrote that when strike action is substantially restricted, it must be replaced by a meaningful mechanism, “such as arbitration.”
Recent decisions out of Ontario have affirmed the constitutionality of just such dispute resolution approaches. In 2024, the Court of Appeal struck down a permanent TTC strike ban because it was insufficiently tailored, failing to proportionally apply different rules between essential and non-essential classes of workers given the public safety and health harms invoked by the province.
In February 2026, the same court upheld legislation ending a five-week Ontario college strike, deeming the infringement of Charter section 2 (d)’s freedom of association protections justified under section 1 because workers received a binding-interest-arbitration process in its place.
Taken together, the cases suggest that a well-designed power to intervene when bargaining has failed will pass muster, provided it is designed around a response to demonstrated public harm, is carefully tailored, and provides an effective dispute-resolution substitute for lost strike leverage.
What’s more, the provinces have already provided some helpful framing for the feds to use in crafting their reforms. Ontario hospital employees, police, ambulance workers, B.C. and Manitoba firefighters and police, and Alberta police, for example, all have some form of dispute-to-arbitration pathway that does not necessarily require striking or lockouts. A 2025 study found no effect in reducing settlements through these methods.
For federally regulated industries, legislation could specify those circumstances in advance. Rail might require consideration of the scale and duration of a shutdown, affected commodities, and alternative freight capacity. Ports might turn on the importance of the trade corridor, availability of alternative terminals and disruption to critical exports or imports. Aviation presents yet another set of considerations.
The CIRB could apply these statutory tests. Where bargaining and mediation have failed, and the board interprets the sector-specific conditions as satisfied, it could direct binding interest arbitration. Special mediator reports, and the use of Section 107, could remain available for genuinely exceptional circumstances that the tailored regime does not adequately address, with the minister required to explain why the ordinary sector-specific process is insufficient.
This has the benefit of greater predictability and less politicization of the issue after it has boiled over. It would not make arbitration automatic whenever bargaining becomes difficult, nor should it. If parties know every impasse will end before an arbitrator, either side may have an incentive to stop compromising.
But once the costs of an entrenched dispute are being borne overwhelmingly by people outside the negotiation, a predetermined and independent dispute-resolution process may be preferable to waiting until political pressure forces another emergency decision, even if it comes after a special mediator’s report.
Bill C-39 rightly tries to move federal labour law away from crisis management. Sector-specific rules would take that logic one step further, establishing more of the balance between bargaining rights and the national interest before trains, planes, or ports are brought to a halt.
Properly understood, labour organizations are mediating institutions giving workers meaningful agency closer to their workplaces than the state—a function lost as provincial and federal legislation has usurped some of the health, insurance, and workplace safety negotiating functions with overbroad legislation in the past century. The growth of provincial and federal labour law is another chapter in the long growth of government at the expense of more local mediating institutions.
But it is stronger local institutions who better serve their constituents: they are closer to the ground, have the incentives and knowledge needed to tailor rules and norms to workers’ needs, and do so in an environment that does not involve the zero-sum class conflict environment or political posturing of threatening strikes or union busting.
Conservatives looking to support local mediating institutions like labour organizations could build upon these reforms by advocating for stronger worker-controlled benefit organizations, expanded employer- and union-led training, and workers-council style labour management committees that give employees a regular voice in workplace decisions.
The opportunity is to build local institutions into a more coherent system that strengthens workers’ institutions without simply expanding government regulation or the power of adversarial unions.
Healthy worker participation has broader effects on social stability. The U.S. entered its recent populist upheaval with comparably weak unionization and bargaining coverage, while European evidence suggests that workers embedded in stronger labour institutions are less likely to abandon mainstream politics for populist alternatives.
A system that strengthens bargaining while reducing reliance on emergency government intervention can therefore be both pro-worker and pro-market. With Bill C-39, the Liberal government is headed in the right direction—but there is more that could be done.
Peter Copeland is the acting director of Domestic Policy at the Macdonald-Laurier Institute.
