It is the day after the Federal Government released its 2017 Red Ink Budget, full of lofty goals and long-term promises. Undoubtedly, given what is happening south of our border, the Canadian Government was forced to take a wait-and-see attitude in terms of making significant economic changes. That is probably a good thing, particularly for Canadian business.

Albeit many see this as a “business as usual” budget, there are some “employment law” changes however, that do warrant consideration, particularly in the federally regulated workplace. This means changes to the Canada Labour Code.

As a bit of background, the regulation of labour and employment law in Canada is split between the federal government and the provinces.

The federal government’s jurisdiction is limited to specific works and undertakings covered under the Canada Labour Code. They include the following business activities:


  • Airports and airlines
  • Banks
  • Canals
  • Exploration and development of petroleum on lands subject to federal jurisdiction
  • Ferries, port services, tunnels and bridges
  • Grain elevators licensed by the Canadian Grain Commission, certain feed mills and feed warehouses, Flour mills and grain seed cleaning plants;
  • Highway transport
  • Many First Nations activities
  • Pipelines
  • Radio and television broadcasting and cable systems
  • Railways
  • Shipping and shipping services
  • Telephone and telegraph systems
  • Uranium mining and processing

The individual provinces regulate all the rest- covering the majority of Canadian workplaces.

However, just in case you are not subject to federal regulation at your workplace – only about 7% of all Canadians are (approximately 900,000 people, according to presently available census data) – don’t stop reading. Ultimately, this could be important to you.

Why? Budgets drive social and economic policy, with a view to steering the country in the direction the government of the day views as appropriate. Just because the more immediate employment law changes may be limited to federally regulated workplaces, do not be surprised if many provinces subsequently choose to adopt similar measures. Thus, present budgetary measures can and do have a real impact upon all workplaces in Canada, and it is important to keep this on your radar scope.

What does the 2017 Federal Budget proposed to do?


Among other things, the Federal Budget proposes targeted amendments to the Canada Labour Code.
The proposed amendments are intended to:

1. Strengthen and modernize compliance and enforcement provisions.

This is aimed at increasing enforcement mechanisms against employers, including:

  • A range of options available to employees making it easier to recover wages they perceive owed to them by their employers – read that as “more complaints/more litigation”.
  • Increased penalties for employers who violate the labour standards provisions of the Canada Labour Code, particularly with respect to payment of wages.
  • The investment of $13 million over five years, starting in 2017–18, and $2.5 million per year ongoing, to strengthen compliance and enforcement mechanisms – read that as “more labour standards investigators/officers, with greater powers”.

 2. Give federally regulated employees the right to request more flexible work arrangements.

This is directed at permitting employees to “better balance work and family demands”. It includes:

  • The right to request flexible work arrangements from employers, such as flexible start and finish times, and/or the ability to work from home.
  • Unpaid leaves for family responsibilities, including participation in traditional indigenous practices, or to seek care if they are victims of family violence.
  • Changes to make bereavement leave more flexible.

It is interesting that when the federal government initially considered this issue in May of last year, its report (summarized from roundtable discussions, stakeholder response and online surveys) indicated that approximately 75% of all employers already grant flexible working arrangements, whether as part of workplace policy, informal practices, or pursuant to existing collective agreement language (unionized workplaces). In that employees will soon have a statutory right to ask for flexibility in work arrangements, the question will be, to what extent management may be permitted to refuse such request, and what supporting information can be demanded from an employee.

Clearly, flexible working arrangements have been introduced and driven by market necessity and the need to attract skilled labour. In our view, government intervention in this area is unneeded – it will do little more than create more complaints and more litigation.

3. Limit unpaid internships in federally regulated sectors.


Last year, the government projected its concern that unpaid internships could be unfair and exploitative. In response, the 2017 federal budget aims at the following:

  • The elimination of unpaid internships in federally regulated sectors where the internships are not part of a formal education program.
  • Granting labour standards protections to unpaid interns who are part of an educational program, including maximum hours of work, weekly days of rest and general holidays.

Undoubtedly, internships are a valuable tool that can give young Canadians the hands-on work experience they need to make a successful transition into the workforce. In fact, during the 2015 election campaign, the Liberals pledged to establish “clear standards around internships [that] would help safeguard legitimate opportunities for young workers while protecting them from exploitation.” These changes are an effort to make good on that promise.

Food for thought: the federal government, through at least 12 different agencies, is the employer with the largest number of unpaid interns in Canada.

It will be interesting to follow the course of the legislation, as the government gives teeth to the present budget initiatives. One thing is certain: there is no likelihood that this government will introduce measures to make workforce management easier.