Non-Compete Clauses Under Fire: Proposed Federal Changes Ahead

Federal employers may soon face a significant shift in how they protect business interests and retain talent. On May 6, 2026, the federal government introduced Bill C-31, Budget 2025 Implementation Act, No. 2, which includes proposed amendments to the Canada Labour Code that would largely prohibit non-compete agreements in federally regulated workplaces.

The proposed amendments would apply only to federally regulated employers and employees, including industries such as banking, telecommunications, airlines, railways, shipping, and interprovincial transportation. Most provincially regulated employers would not be affected by these changes, though provincially-regulated employers in Ontario will already be familiar with the prohibition on non-competes, in effect since fall 2021