Will The Canada Labour Code Prohibit Non-competition Clauses?

In May 2026, the federal government introduced Bill C-31, the Budget Implementation Act, 2025, No. 2. Among the proposed measures is a significant reform to the Canada Labour Code that would prohibit, subject to limited exceptions, non-competition clauses and possibly certain other employment-related restrictions for employees of federally regulated employers.

This initiative, which has curiously received very little attention, forms part of a broader movement in Canada in favour of labour mobility and more competitive labour markets. Ontario's legislature in fact passed similar provisions several years ago. The proposed prohibition in the Canada Labour Code nevertheless raisesparticular issues in Quebec, since the Civil Code of Québec expressly recognizes the validity of non-competition clauses where they meet certain strict conditions, unlike the general situation in the other Canadian provinces, including Ontario.