This bulletin provides an update to our April 2026 bulletin in which we reported on the federal government's launch of consultations on potential reform to the Canada Labour Code ("Code"). On July 3, 2026, the Government of Canada announced a second round of consultations. This second phase will build on, and go deeper into, a targeted subset of issues emerging from the first round of consultations.
Background: First Round of Consultations
As we reported in our April 2026 bulletin, the federal government launched its first round of consultations on April 17, 2026, seeking stakeholder feedback on potential reforms to the Code.
The government received a total of 208 written submissions and conducted 13 virtual roundtables with employers, unions, labour organizations and Indigenous partners, two additional national union roundtables, a Ministerial roundtable, and discussions with the Tripartite Advisory Council.
A key takeaway from the initial round was that aspects of Canada's labour relations framework are functioning well, and that any policy or legislative changes should be carefully targeted to address specific issues rather than applied in an overly broad manner. The government has recommitted to publishing a "What We Heard" report later this year covering the input received from both rounds of consultation.
Second Round: Scope and Process
The second round of consultations is described by the government as a "targeted" phase, one that builds on emerging themes from the first round and seeks more precise feedback on a defined subset of issues.
As with the first round, the engagement process will include targeted virtual and in‑person roundtables with employers and employer representatives, unions and employee groups, Indigenous partners, and other key stakeholders. Written submissions from any interested party in the federally regulated sector are welcome.
Written submissions are due by August 2, 2026 and should be sent to: [email protected].
Topics Identified for Feedback
The second-round consultation document identifies seven specific subject areas on which stakeholder input is being sought:
- Section 107 of the Code and the concept of "industrial peace," including whether further guiding principles or definitional clarity should govern the Minister's use of this provision;
- Expedited grievance arbitration, including the structural drivers of grievance delays and whether provincial models, such as those in British Columbia and Ontario, should be adopted in the federal sector;
- Bad faith bargaining, including whether existing Code provisions should be strengthened and whether financial penalties, including for frivolous or vexatious complaints, could serve as an effective deterrent;
- The length of strike and lockout mandates, including whether the current 60‑day validity period should be extended or whether mandates should remain valid until a new collective agreement is reached;
- First collective agreements, including whether mandatory early involvement of the Federal Mediation and Conciliation Service would improve outcomes and what additional tools could help parties overcome impasses;
- Medical leave with pay, including concerns about the "stacking" of benefits from overlapping leave regimes, employer flexibility to request medical certificates, and whether medical leave provisions should be subject to collective agreement opt‑out under the Code; and
- Wage theft and enforcement across all federally regulated sectors, including unpaid overtime, illegal deductions, misclassification, and whether fines, licence revocation, or prosecution should be available as enforcement tools.
As with the first round, stakeholders are also invited to propose any other potential policy initiatives, new tools, or legislative changes to the Code that could help strengthen labour relations.
Considerations for Employers
The second round of consultations is narrower in scope than the first but more targeted and substantive. The introduction of topics such as bad faith bargaining penalties, the length of strike mandates, and medical leave flexibility signals that the government's reform agenda is beginning to crystallize around specific legislative changes.
It is critically important that federal employers provide submissions to ensure that their perspectives and concerns are heard. The deadline for written submissions is August 2, 2026, and employers should begin preparing their submissions promptly. Employers who participated in the first round should consider whether supplementary input is warranted in light of the more targeted questions now under consultation. Employers who did not participate in the first round now have an important opportunity to make their voices heard before the consultation window closes.
