Liberal Labour Bill Would Give Ottawa Explicit Power to End Strikes in the ‘National Interest,’ Experts Warn

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A few lines buried deep inside a sweeping federal bill could significantly reshape how Ottawa handles some of Canada’s most disruptive labour disputes. Bill C-39, the Liberal government’s Building Canada Strong Act, would rewrite Section 107 of the Canada Labour Code so the labour minister could explicitly direct the federal labour board to resume operations, extend a collective agreement or impose binding dispute resolution once a legal strike or lockout is underway.

The government describes the change as a clarification of powers Ottawa already possesses, combined with new safeguards. Labour lawyers, academics and unions dispute that interpretation, warning that Parliament would be putting much clearer strike-ending authority into law. At the centre of the disagreement is a deceptively broad standard: whether a work stoppage adversely affects, or may adversely affect, the “national interest.”

What Bill C-39 Would Actually Change

Section 107 already gives the federal labour minister unusually broad language to work with. The existing Canada Labour Code says the minister can take steps considered useful for maintaining industrial peace and can direct the Canada Industrial Relations Board to take measures considered necessary. Governments have relied on that wording in recent disputes, but the law does not currently spell out a specific power to order striking employees back to work or force unresolved issues into arbitration. Bill C-39 would remove much of that ambiguity by writing those options directly into the legislation.

Under the proposed wording, once a lawful strike or lockout has started, the minister could direct the board to order operations or employee duties to resume or continue, temporarily extend a collective agreement, or impose a binding method for resolving outstanding issues. There would be conditions: the minister would first have to consider a special mediator’s report and conclude that the work stoppage adversely affects, or may adversely affect, the national interest. Bill C-39 is not yet law. As of September 25, it remained at second reading in the House of Commons.

Section 107 Was Controversial Before This Bill Arrived

The fight over Bill C-39 did not begin with its introduction on September 21. Ottawa has already used the existing Section 107 aggressively enough to make its meaning one of the biggest unresolved questions in federal labour relations. A federal briefing document prepared earlier in 2026 said there had been 10 Section 107 referrals since 2023. Nine were used to end or temporarily pause a strike or lockout, impose arbitration, or do some combination of those things.

Those interventions included disputes involving CN and CPKC, West Coast ports, the ports of Montreal and Quebec, Canada Post and Air Canada. That history explains why the government considers the amendment partly a clarification: ministers have already acted on the assumption that Section 107 permits these measures. Critics see the history differently. If the existing language already unquestionably authorized Ottawa to terminate lawful work stoppages through board directions, they argue, there would be less reason to rewrite the provision so explicitly. Courts are now considering challenges to several of those earlier interventions, meaning the legal boundary of the old Section 107 has not been definitively settled.

The ‘National Interest’ Test Leaves the Minister Considerable Room

Bill C-39 does not provide a short, exhaustive definition of the national interest. Instead, it says the minister may consider any relevant factors, including whether the work stoppage has or may have a significant impact on the Canadian economy, whether it is causing or may cause serious social disruption, and whether a ministerial direction would affect freedom of association. That final consideration matters because freedom of association under the Charter encompasses constitutional protection for meaningful collective bargaining and the right to strike.

The wording is significant because economic disruption is normally part of the leverage created by a strike. Jobs Minister Patty Hajdu has described the proposed national-interest threshold as a high bar and has said there cannot be a blanket answer about exactly when it would be crossed. Transportation disputes involving essential or perishable goods are among situations where pressure can rise quickly. Critics nevertheless point to the flexibility in the statutory language. “Serious social disruption” is not tightly defined, while the phrase “any relevant considerations” means the three listed factors would not be the minister’s only possible considerations.

The Supreme Court’s Right-to-Strike Ruling Looms Over the Debate

Any future use of the proposed power would operate against a constitutional backdrop established more than a decade ago. In its 2015 Saskatchewan Federation of Labour decision, the Supreme Court of Canada held that the right to strike is an essential component of meaningful collective bargaining protected by Section 2(d) of the Charter. The majority emphasized that workers’ ability to collectively withdraw their labour provides leverage when negotiations reach an impasse and helps address the unequal bargaining power that can exist between employees and employers.

That does not mean every restriction on a strike is automatically unconstitutional. Governments can seek to justify infringements on Charter rights as reasonable limits, and Canadian labour law already contains special arrangements for genuinely essential services. The unanswered question is how far economic concerns can carry that justification. Queen’s University labour-law scholar Bethany Hastie told The Canadian Press that the Supreme Court has not yet pronounced on whether significant adverse economic consequences, by themselves, can justify limiting strike rights in this way. That makes the proposed national-interest test more than a question of labour policy. Its eventual application could generate a major constitutional test.

Recent Rail, Port and Airline Disputes Explain Ottawa’s Concern

The federal government does not have to look far for examples of why transportation work stoppages can trigger national pressure. On August 22, 2024, CN and CPKC locked out nearly 9,300 workers, shutting down service on both major railways. Government records later estimated that approximately 830,000 tonnes of goods valued at $1.1 billion were halted. The labour minister invoked Section 107 the same day, directing the industrial relations board toward resumed operations and binding arbitration. The union representing rail workers subsequently challenged the intervention.

Air transportation produced another confrontation in August 2025. Air Canada and its flight attendants entered a strike and lockout, and the minister invoked Section 107 on the first day. The board subsequently ordered the stoppage to end and later declared the continuing strike unlawful. Workers nevertheless remained off the job until the parties reached a tentative agreement on August 19. The episode demonstrated both the practical power and the practical limitations of government intervention: an order can change the legal status of a dispute, but it does not automatically resolve the underlying bargaining conflict.

Ottawa Says the Bill Adds Guardrails, Not a New Shortcut

The government’s defence of C-39 rests heavily on what would happen before Section 107 could be used. The bill creates a special-mediator process that could begin no later than the 75th day of conciliation. The mediator would receive a 21-day mandate to help the parties settle, then provide a report describing the outstanding issues, each side’s position, participation in the process, the likelihood of a negotiated agreement and the mediator’s recommendations. Unless an agreement intervened, that report would eventually become public.

The broader process also lengthens the standard conciliation period from 60 to 90 days and is designed to provide at least 10 days between publication of a special mediator’s report and a legal work stoppage. Ottawa argues these steps would make intervention more structured and transparent, while creating more opportunities for bargaining to succeed first. The government notes that roughly 95 per cent of disputes in federally regulated sectors already end without a work stoppage with assistance from the Federal Mediation and Conciliation Service. Part I of the Code covers more than one million employees and over 22,000 employers.

Critics Worry the Power Could Change Bargaining Before a Strike Starts

A government power does not necessarily have to be exercised to influence negotiations. That is one of the central concerns raised by labour academics and unions. If employers in strategically important industries believe Ottawa is likely to impose arbitration once a strike becomes economically painful, unions argue that management could have less incentive to make concessions before a walkout. Conversely, employers contend that clearer intervention rules could reduce uncertainty and discourage disputes from escalating unnecessarily.

Research on compulsory arbitration shows why confident predictions should be treated cautiously. A study of Ontario public-sector bargaining between 1984 and 1993 found bargaining units subject to compulsory interest arbitration reached impasse between 8.7 and 21.7 per cent more often than units retaining the right to strike, evidence associated with the long-debated “chilling” effect of arbitration. More recent Canadian research covering several decades reached a more qualified conclusion: different dispute-resolution regimes affected how agreements were ultimately settled, but restrictions on strikes were not significantly associated with a lower probability of parties directly negotiating an agreement. The evidence therefore supports concern about bargaining incentives without establishing one inevitable outcome for C-39.

Employers Point to the Cost of Letting Critical Networks Stop

Business organizations approach the same issue from the opposite side of the bargaining table. Federally Regulated Employers — Transportation and Communications, whose members include employers in rail, ports and aviation, has welcomed elements of C-39. Its chief executive, Derrick Hynes, has argued that special mediation and a national-interest test could improve stability, while also saying the threshold for government intervention should be high. Other employer organizations have emphasized the ripple effects that transportation and postal disruptions can create for businesses far removed from the original bargaining table.

Past port disruptions illustrate the scale of those concerns. During parliamentary testimony after the 13-day British Columbia port strike in 2023, Transport Canada’s chief economist estimated that between $10 billion and $13 billion worth of shipments were affected. The department estimated the net economic loss at roughly $750 million to $1 billion. The later federal Industrial Inquiry Commission on West Coast ports reported that those ports handle an average of about $800 million in cargo each day and roughly one-quarter of Canada’s annual goods trade. Those figures help explain the pressure governments face when a dispute reaches a major trade gateway.

Existing Court Challenges Could Shape What Comes Next

Ottawa’s recent Section 107 interventions have already moved the conflict from bargaining tables into courtrooms. Federal briefing material says unions have challenged orders connected with work stoppages in 2024 and 2025, arguing that forcing strikes or lockouts to end and imposing arbitration interferes with meaningful collective bargaining protected by the Charter. Those proceedings involve disputes across rail, ports, postal service and aviation, and are moving through the Federal Court and Federal Court of Appeal.

Bill C-39 would change the legal question in an important way. Challenges to the old provision can focus partly on whether Parliament ever gave the minister authority broad enough to order these outcomes in the first place. If C-39 passes with its proposed wording, that statutory-authority argument would become much harder to make because Parliament would have expressly listed resumption orders and binding dispute resolution. Litigation could instead concentrate more heavily on whether the new power — or a particular ministerial decision made under it — complies with the Charter. That distinction does not determine how courts would rule, but it helps explain why experts describe the amendment as consequential rather than merely procedural.

Parliament Has Not Had the Final Word

Despite the attention surrounding Section 107, C-39 is still near the beginning of the legislative process. It received first reading on September 21, 2026, and second-reading debate was underway in the House of Commons on September 24. It had not yet reached committee, report stage, third reading or the Senate, and Parliament’s official tracking system listed no recorded votes on the bill. That leaves room for amendments as MPs scrutinize the labour provisions alongside the bill’s extensive measures dealing with projects, transportation and the broader economy.

The debate is ultimately about two competing risks rather than a simple choice between strikes and economic stability. Ottawa argues that major national disruptions require a transparent last-resort mechanism, backed by mediation and an assessment of economic, social and Charter considerations. Labour organizations and several legal scholars argue that making strike-ending powers explicit could weaken the leverage that gives collective bargaining meaning. Employer groups see greater certainty as valuable but have also acknowledged that the intervention threshold should be substantial. If C-39 advances, the wording Parliament ultimately adopts — and how future ministers use it — will determine whether those promised guardrails operate as meaningful limits or become the centre of the next round of legal challenges.

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