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Canada to Ban Non-Compete Clauses in Federally Regulated Workplaces

By  |  October 27, 2025

The Canadian government is preparing to outlaw non-compete agreements for employees in federally regulated sectors, including banking, as part of a wider effort to enhance labor mobility and support workers. According to Bloomberg, the proposed legislative changes will be introduced through amendments to the Canada Labour Code and are scheduled for consultation early next year.

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    Jobs Minister Patty Hajdu announced the plan Monday, noting that it will be featured in the upcoming federal budget on November 4. Per Bloomberg, the initiative is designed to make it easier for employees to pursue higher-paying opportunities or launch their own businesses without being restricted by previous employers. The government stated that the reform would “empower workers to move more freely to a higher-paying career or start their own business.”

    Non-compete agreements have already been restricted at the provincial level in Ontario since 2021, while courts across Canada have typically been hesitant to enforce them. In the United States, the Federal Trade Commission attempted to ban nearly all such agreements in 2024, but the policy was abandoned after being struck down by a court earlier this year, Bloomberg reported.

    Beyond the ban on non-competes, the government is expected to unveil a number of labor-related measures in the upcoming budget. These include expanding a union training program to support apprenticeships in the skilled trades. The goal, according to a government statement cited by Bloomberg, is to ensure that there are enough Canadian workers to meet the country’s infrastructure and housing demands.

    The government also plans to allocate C$97 million over five years to establish a new fund that speeds up the recognition of foreign credentials. This initiative is aimed at helping newcomers and internationally trained professionals enter the workforce more quickly.

    In addition, the budget will introduce a re-skilling package first promised by Prime Minister Mark Carney in September, which will assist workers affected by U.S. tariffs. The plan includes an online job-matching platform and expanded employment insurance benefits to help displaced workers transition into new roles.

    To further support frontline care providers, Ottawa is proposing a temporary five-year refundable tax credit for personal support workers. The credit would equal 5% of eligible earnings, up to C$1,100, and apply only to those in provinces or territories that have not reached pay-boosting agreements with the federal government.

    Source: Bloomberg