A long-running argument over how far Ottawa can go to stop federally regulated strikes is moving from courtroom disputes into the text of federal law. Bill C-39, the Liberal government’s Building Canada Strong Act, proposes a major rewrite of Section 107 of the Canada Labour Code, the provision Ottawa has repeatedly relied on during disruptive labour battles.
The proposed wording would expressly allow the labour minister, after certain conditions are met, to direct the Canada Industrial Relations Board to restore operations or employment duties, extend an existing collective agreement, or impose a binding method for resolving a dispute. The legislation was introduced on September 21, 2026, and remains before Parliament rather than being law.
The Bill Would Make Ottawa’s Intervention Power More Explicit
The most closely watched change is remarkably direct. Bill C-39 would replace the existing Section 107 with language saying that, once a lawful strike or lockout is underway, the minister could direct the Canada Industrial Relations Board to order operations or employees back to work, temporarily extend a collective agreement or impose binding dispute resolution. Before doing so, the minister would have to consider a special mediator’s report and conclude that the disruption adversely affects, or may adversely affect, the national interest.
That distinction matters because the existing Canada Labour Code does not spell out those remedies nearly as specifically. It currently says the minister may take steps considered likely to maintain industrial peace and may direct the Board to do things the minister considers necessary. The government describes Bill C-39 as clarifying an authority it already possesses rather than creating an entirely new one. Labour experts and unions dispute that interpretation, arguing that explicitly writing back-to-work and binding-arbitration powers into the statute could materially strengthen Ottawa’s legal position.
Section 107 Has Become One of Canada’s Biggest Labour Flashpoints
For decades, Section 107 attracted relatively little public attention. That changed as Ottawa increasingly relied on it during disputes involving industries capable of creating immediate national disruptions. Federal records show that between 2023 and early 2026 there were 10 Section 107 referrals, nine of which were used to end or temporarily halt strikes or lockouts, or to impose arbitration. Those interventions included disputes involving railways, ports, Canada Post and Air Canada.
The controversy is partly about what Parliament originally authorized. The present provision allows the minister to direct the labour board to take steps considered necessary for industrial peace, but whether that broad wording permits Ottawa to effectively terminate a lawful strike has been challenged. The Canadian Pacific Kansas City and Canadian National railway disputes helped bring that question to the forefront, with unions seeking judicial review after the government used Section 107 to move the dispute into binding arbitration. Bill C-39 would make the contemplated intervention powers much less ambiguous on the face of the statute.
‘National Interest’ Would Become the Critical Test
Bill C-39 does not give the minister an entirely unrestricted trigger. The proposed law says intervention during a lawful work stoppage would require the minister to form the opinion that the strike or lockout adversely affects, or may adversely affect, the “national interest.” It then supplies a non-exhaustive set of factors the minister may examine, including whether the dispute could significantly affect the Canadian economy, cause serious social disruption, and whether government intervention would affect freedom of association.
That wording creates both a threshold and an area of uncertainty. “National interest” and “serious social disruption” are not defined by a simple dollar-loss figure, number of stranded travellers or fixed duration of a stoppage. The government’s accompanying policy material says its assessment would consider economic disruption, broader public and social consequences, the protected right to strike, and possible alternatives or mitigation measures. Labour critics argue the standard remains broad enough to give future ministers substantial discretion. The government’s position is that requiring such an assessment creates a constraint that does not exist as clearly under the current Section 107.
A Special Mediator Would Have to Come First
The proposed system is designed to put another attempt at settlement between ordinary conciliation and extraordinary government intervention. Bill C-39 would let the minister appoint a special mediator no later than the 75th day after the formal conciliation process begins. That mediator would receive a 21-day mandate to work intensively with the employer and union in search of an agreement. Appointment of the mediator itself would not suspend the parties’ eventual right to strike or lock out.
If negotiations still failed, the mediator would prepare a report identifying the unresolved issues, each side’s position, an assessment of their participation, the likelihood of a negotiated settlement and the mediator’s recommendations. Subject to privacy and confidential-business-information redactions, the report would generally become public. The legislation is structured so that the special-mediation process occurs before legal strike or lockout action, with at least 10 days between publication of the mediator’s report and a work stoppage. Only after the mediator has completed that process could the minister use the bill’s new Section 107 conditions to end an ongoing disruption.
Ottawa Also Wants More Time Before Disputes Reach the Breaking Point
The intervention provision has captured most of the attention, but Bill C-39 attempts to change the timeline well before workers reach a picket line. The government proposes expanding the normal conciliation period from 60 days to 90 days. In bargaining relationships that previously ended in a strike, lockout or imposed resolution, the legislation would also require earlier engagement and create additional opportunities for federal mediators to become involved before positions harden.
That focus reflects the reality that most federal bargaining rounds never become national crises. Employment and Social Development Canada reported that 97 per cent of disputes involving Labour Program assistance were settled without a work stoppage in 2024-25, following 96 per cent in each of the previous two fiscal years. More than one million employees and over 22,000 employers operate within federally regulated sectors covered by Part I of the Code. The government therefore portrays the additional mechanisms as tools aimed primarily at the relatively small group of disputes that become chronically difficult or economically disruptive.
Recent Rail, Port, Postal and Airline Disputes Explain the Pressure
The debate is difficult to separate from what happened in 2024 and 2025. In August 2024, CN and CPKC locked out approximately 9,300 rail workers as negotiations reached an impasse. Ottawa invoked Section 107, and the Canada Industrial Relations Board subsequently ordered operations to resume and imposed binding arbitration. Federal agriculture briefing material estimated that about 830,000 tonnes of goods valued at roughly $1.1 billion were halted during the shutdown.
Similar intervention followed disputes at West Coast ports and the Port of Montreal, while Canada Post workers were ordered back in December 2024 after beginning a nationwide strike on November 15. Section 107 surfaced again during the Air Canada-CUPE dispute in August 2025, when the government directed the CIRB toward resumed operations and binding arbitration. Those episodes illustrate why employers, exporters and governments are focused on supply-chain continuity. They also explain union concerns: a power used repeatedly during high-profile disputes can affect bargaining behaviour even before the government actually invokes it.
The Constitutional Question Is Far From Settled
Any attempt to end a lawful strike operates against an important Supreme Court precedent. 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 and is protected by freedom of association under Section 2(d) of the Charter. That does not mean governments can never restrict strikes, but restrictions must survive constitutional scrutiny, including the possibility of justification under Section 1.
Bill C-39 therefore specifically tells the minister to consider the effect of an intervention on freedom of association when evaluating the national interest. Legal academics interviewed by The Canadian Press have nevertheless identified a potentially significant unresolved issue: Canadian courts have accepted restrictions in contexts such as genuinely essential services, but the Supreme Court has not definitively established how far serious economic harm alone can justify ending protected strike activity. Existing challenges to previous Section 107 interventions add another layer, because courts are already being asked to examine the limits of the current provision while Parliament considers replacing its wording.
Unions Say the Changes Could Alter Bargaining Before Any Order Is Issued
The Canadian Labour Congress has come out against the Section 107 provisions, arguing that giving government a clearer route to terminate a legal strike could weaken labour’s leverage at the bargaining table. Its argument is not simply about the day an intervention order arrives. The CLC says an employer that expects Ottawa eventually to step in may have less incentive to make concessions as the economic consequences of a work stoppage increase. That is the labour movement’s interpretation, rather than an established effect of the legislation.
Teamsters Canada and Unifor have made similar objections. Teamsters says the new procedure does not amount to meaningful restrictions on ministerial intervention, while Unifor has warned that the national-interest test could affect how both employers and unions approach negotiations. At the same time, major unions have welcomed other components of Bill C-39, including stronger successor rights when contracts change hands, measures dealing with first collective agreements and efforts to strengthen wage enforcement. The labour response is therefore not a rejection of every workplace reform in the bill; Section 107 is the central dividing line.
Business Groups See Labour Stability Through a Different Lens
Industries dependent on railways, ports and other transportation networks have spent years arguing that repeated shutdowns can damage Canada’s reputation as a dependable trading economy. The Canadian Chamber of Commerce has called reliable supply chains essential to Canadian competitiveness and previously urged Ottawa to reform federal labour rules affecting critical trade infrastructure. During the 2024 rail dispute, the Chamber and other business organizations explicitly asked the federal government to act to maintain rail service.
Fertilizer Canada responded favourably to Bill C-39, describing longer bargaining timelines and special mediation as positive steps toward more predictable dispute resolution. The group, whose members depend heavily on rail and port networks, has also advocated government authority to compel arbitration when a disruption threatens what it regards as the national interest. That position illustrates the basic tension running through the legislation: employers and trade-dependent industries tend to emphasize continuity and economic reliability, while unions emphasize maintaining enough strike leverage for collective bargaining to remain meaningful. Bill C-39 attempts to put both considerations into one statutory framework.
The Fight Over Section 107 Is Only One Part of a Much Bigger Bill
Bill C-39 extends well beyond government intervention in strikes. Its labour provisions include stronger protections when certain service contracts change employers, measures dealing with first collective agreements, expanded geographic certification rules, enforcement mechanisms involving unpaid wages and additional tools aimed at bad-faith bargaining. It would also require post-dispute mediation within six months when a collective agreement follows a strike, lockout or imposed binding settlement, an attempt to repair labour-management relationships before the next negotiating round begins.
Those proposals emerged after two federal consultation rounds in 2026 involving more than 100 unions, labour organizations, employers, employer associations and National Indigenous Organizations. The government says it received 319 written submissions and held 13 targeted roundtables. Bill C-39 was introduced on September 21 and, as of September 25, remained legislation under consideration rather than enacted law. Parliamentary study, potential amendments and any later court challenges will determine how much of the proposed framework ultimately survives—and whether the phrase “national interest” becomes a rarely used emergency threshold or a central feature of future federal labour disputes.
