Amid growing tariff challenges from the United States, on June 6, 2025 Canada’s federal government introduced Bill C-5, the One Canadian Economy Act. Bill C-5 contained two acts: the Free Trade and Labour Mobility in Canada Act and the Building Canada Act. The Bill received Royal Assent on June 26, 2025.

Bill C-5 was designed to enhance Canada’s economic competitiveness and had been touted as necessary to accelerate major, nation-building projects by removing additional federal layers of approval and building “one economy out of thirteen.[1]” The Bill is considered to be the federal government’s response to the recent economic pressures from the U.S. and an effort to make domestic trade more attractive as well as remove barriers to the flow of labour between Canadian jurisdictions.

Of the two acts, the Free Trade and Labour Mobility in Canada Act (the “Labour Mobility Act”) is of most interest to employers in the construction sector. The Labour Mobility Act provides for a labour mobility framework to reduce the barrier for certified workers in the skilled trades to work at any jurisdiction in Canada. A skilled trade worker certified in any province will be recognized as qualified for any federal project in any province without having to seek further approval or be subjected to additional federal requirements, provided that the provincial standards are comparable to their federal counterparts. The new legislation will make it easier for businesses to work on federal projects across the country.

Although it is too early to tell whether the new Labour Mobility Act will indeed make it simpler for labour to flow across provincial lines and, consequently, accelerate major federal projects, employers in the construction industry should be mindful of the following:

  • The Labour Mobility Act only applies to federal projects in federally-regulated sectors such as railway, telecommunications and banking. Provincial projects will need to continue to comply with provincial legislation. Although some provinces have introduced their own domestic free trade legislation (for example, Ontario’s Protect Ontario Through Free Trade within Canada Act, 2025), others have not, creating a lack of uniformity at the provincial level across the country.
  • Interprovincial labour mobility may lead to pressures on employers in lower-wage jurisdictions to match compensation in higher-wage jurisdictions or risk local workers not returning to their home province. In addition, lower-wage jurisdictions may face difficulties attracting workers from other provinces if wages are not raised.
  • The Labour Mobility Act requires all employers, unionized and non-unionized, to recognize as qualified any worker who was certified in another Canadian jurisdiction. However, unionized employers must comply with their collective agreement obligations and hiring hall rules, and risk being faced with a grievance if they hire a qualified out-of-province worker who was not dispatched by the hiring hall. Practically, therefore, the Labour Mobility Act has little application for unionized employers.

It remains to be seen whether the new legislation will in fact achieve its aim to strengthen the economy by reducing barriers for labour to cross provincial lines. Much will depend on the willingness of provinces to cooperate and develop their own free trade legislation to match the federal initiative. 

For further insights into how Bill C-5 may impact your business, we encourage you to reach out to our Construction and Infrastructure Group for guidance on navigating these changes in major infrastructure projects, or contact our Labour and Employment Law Group for advice on the evolving labour mobility framework and its implications for workforce management.

[1] https://www.canada.ca/en/intergovernmental-affairs/news/2025/06/government-of-canada-introduces-legislation-to-build-one-canadian-economy.html?utm_source=chatgpt.com