As part of the 2025 Federal Budget, released on November 4, 2025, the Government of Canada announced plans to amend the Canada Labour Code (the Code) to restrict the use of non-compete agreements in employment contracts for federally regulated businesses. This includes sectors such as banking, transportation, and telecommunications.
In its news release, the government stated that the proposed restriction aims to protect workers' rights, promote labour mobility, and strengthen competition. Specifically, the measure is intended to "empower workers to move more freely to a higher-paying career, or start their own business." Formal consultations on the proposed legislative changes are expected to begin in early 2026.
While details of the proposed amendments to the Code have not yet been released, we can look to Ontario's recent experience with non-compete bans for insight. In 2021, the Ontario government amended the Employment Standards Act, 2000 (the ESA) to prohibit employers from entering into "an agreement or part of an agreement" that prohibits an employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer's business after the employment relationship between the employee and the employer ends. While the prohibition is very broad, the ESA includes two exceptions where non-competes are still permitted:
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