Proposed Amendments Revealed Restricting Non-Compete Clauses And Other Employment-Related Restrictions: Canada Labour Code

Following the 2025 Budget tabled in Parliament on November 4, 2025, which proposed amendments to the Canada Labour Code to restrict the use of non-compete agreements,¹ draft legislation published by the Department of Finance on May 4, 2026 provides further insight into the form those amendments may take – if passed – in Division 9 of the Notice of Ways and Means Motion to introduce a bill entitled A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025 (the “Notice”).²

Restrictions & Key Definitions

The Notice prohibits employers from agreeing to, or imposing a (i) non-compete clause and (ii) “other employment-related restriction” with an employee or trade union, and deems such clauses or restrictions as void (or in Quebec, null). The terms non-compete clause and other employment-related restriction are both defined in the Notice as follows: