Federal Budget 2018 – Key labour and employment-related provisions

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The federal government tabled its 2018 Budget, entitled “Equality + Growth: A Strong Middle Class” in the House of Commons on February 27, 2018. We have summarized below those measures announced in the Budget that have labour and employment consequences.

1. Pay Equity – new proactive legislation

The federal government has announced that it will take steps to reduce the gender-based wage gap in Canada. One of these steps will be to introduce new, proactive pay equity legislation that will apply to employers in federally-regulated sectors with more than 10 employees, including the federal public service. This legislation will be introduced before the end of 2018. This is not a new commitment. The government first indicated its intention to introduce “proactive pay equity legislation during this current mandate with a target of late 2018” in its Response to the First Report of the Standing Committee on Pay Equity, that was tabled in the House of Commons on October 15, 2016. In its 2018 Budget, the government has indicated that the details of this new proactive pay equity legislation, which will draw on the provincial models currently in place in both Ontario and Quebec, will be included in budget implementation legislation. The government has also committed to continuing to consult with employers, unions and other stakeholders over the coming months in order to ensure that the new pay equity regime will be applied fairly and will achieve its intended purpose.

2. EI Parental Sharing Benefit

In an effort to encourage more fathers to take a portion of the parental leave that is available to parents of newborns and adoptive parents, the government is going to introduce additional weeks of “use it or lose it” Employment Insurance (EI) Parental Benefits. The proposed benefit will be available to eligible two-parent families, including adoptive parents and same-sex couples. Where the second parent agrees to take a minimum of five (5) weeks of parental leave, the couple’s combined entitlement to EI parental benefits will be increased as follows:

  • Where the couple opts to receive EI benefits at 55% (currently available for 35 weeks) their combined entitlement will be increased by a total of five (5) weeks, from 35 weeks to 40 weeks; and
  • Where the couple opts for the extended EI parental benefits at 33% (currently available for 61 weeks) their combined entitlement will be increased by a total of 8 weeks, from 61 to 69 weeks in total.

The maximum period of parental leave that any one parent can take under the standard option is limited to 35 weeks. To access the additional five weeks of benefits, any combination of sharing will be eligible. This could include, for example, 20 weeks for one parent and 20 weeks for the other, or 35 weeks for one and five (5) weeks for the other. Equivalent conditions will apply for parents who choose the extended parental leave option. The government expects this new benefit to be available starting in June of 2019.

The government’s intention in introducing this change is to encourage more parents to share the responsibilities of raising children, thereby providing greater flexibility for mothers who wish to return to the workforce sooner.

3. Family Violence Leave – 5 paid days

In its 2017 Budget, the federal government announced that it would be introducing a new category of unpaid, job-protected leave under the Canada Labour Code. This new leave would entitle employees in federally-regulated industries to take up to 10 days of leave if they themselves, or a child of theirs, is the victim of family violence. The details of this leave were set out in Bill C-63, the Budget Implementation Act, 2017, No. 2, which was introduced in Parliament on October 27, 2017. Bill C-63 has passed Third Reading and has received Royal Assent on December 14, 2017, but the relevant provisions have not yet been declared in force.

In its most recent Budget, the federal government has announced that it will further amend the Canada Labour Code to provide that eligible employees will be entitled to five (5) days of Family Violence Leave with pay. This change mirrors very closely what the provincial government did in Ontario when it introduced Domestic or Sexual Violence leave through Bill 148. The Ontario legislation provides for up to 10 days (and 15 weeks) of Domestic or Sexual Violence leave in each calendar year, with the first five (5) of those days being paid leave.


In our view

Some of these changes can be expected to have a significant impact on federally-regulated employers. Further details about these changes will be spelled out in budget implementation legislation. We will monitor developments as they occur and keep readers apprised of details as they become available.

For further information please contact Raquel Chisholm at 613-940-2755 or Sébastien Huard at 613-940-2744.