Question Period Note: FORCED LABOUR (GLOBAL SUPPLY CHAINS)

How is Canada addressing exploitative labour practices in global supply chains?

• The Government of Canada believes in the importance of upholding human rights, including international labour standards, in global supply chains.

• The Government will continue to work closely with stakeholders and international partners to address exploitation in supply chains.

[Responsive on the Fighting Against Forced Labour and Child Labour in Supply Chains Act]
• An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff came into force on January 1, 2024. Public Safety Canada is responsible for its implementation.

• The Government is aware that stakeholders have been critical of this legislation and have been pressing for greater clarity and consistency with international norms and approaches in other jurisdictions.

• The Government remains committed to eradicating forced labour and labour exploitation from global supply chains.

[Responsive on the import ban on goods produced with forced labour, which falls under CBSA’s/the Minister of Public Safety’s enforcement authority]
• The Canada Border Services Agency is responsible for the enforcement of the import ban.

• Federal departments are working together to strengthen the regime, further to consultations held by Global Affairs Canada, and ongoing discussions with international counterparts, including the U.S.

Global Estimates
• The International Labour Organization estimates that there are 27.6 million victims of forced labour worldwide (2021).
o 23% of victims are found in forced commercial sexual exploitation
o 63% of forced labour victims are found in the private economy
o 14% of victims are in state-imposed forced labour

• Among the cases of forced labour reported in the private economy, the following sectors accounted for the highest share: industry (mining, fishing, etc.), services (wholesale, trade, accommodations, etc.), agriculture (forestry, hunting, etc.,) and domestic work.

• 12% (3.3 million) of all those in forced labour are children.

• Women and girls make up 43% (11.8 million) of the total people in forced labour.

• World Vision estimates that nearly $48 billion in goods imported into Canada in 2021 were at risk of being made with forced and/or child labour, representing 7.5% of total imports.

International and Domestic Efforts
• Internationally, several jurisdictions have adopted or announced legislation to address labour and human rights abuses and violations in global supply chains. These include transparency reporting supply chain legislation (e.g., UK and Australia), due diligence supply chain legislation (e.g., France, Norway, Germany and the European Union) and import bans that block goods made using forced labour (e.g., U.S., Mexico and the European Union). Supply chain legislation is a proactive measure that requires companies to look into their supply chains and identify/address risks of forced labour (or other human rights violations, depending on the scope of legislation). Import bans are a reactive trade/border measure to block market access of goods determined to be made with forced labour. This is distinct from supply chain legislation, which is not specific to any one good, sector or country, and applies to regulated parties irrespective of whether or not they import goods into a particular country.

• Canada is the only country that has both federal supply chain legislation (transparency reporting, former Bill S-211, referred to as “The Supply Chains Act”, administered by Public Safety Canada) and an import ban on goods produced with forced labour currently in place. (Of note, the U.S. has an import ban on goods produced with forced labour and in addition, the State of California has supply chain legislation. However, the U.S. does not have federal supply chain legislation).

• In addition, in November 2024, the European Council adopted the “regulation on prohibiting products made with forced labour on the Union market,” which is expected to come into force in 2027. Apart from the regulation, the European Union Corporate Sustainability Due Diligence Directive (CSDDD), which introduces supply chain due diligence requirements for Member States to transpose into national laws, was adopted in July 2024 with requirements expected to come into effect in July 2028. Once both the regulation and CSDDD come into force, the European Union will become the first jurisdiction to have both supply chain due diligence legislation and an import ban in place.

• Canada continues to work closely with the U.S., Mexico and other international partners on labour exploitation issues. In discussions on these issues in multilateral fora including the United Nations (UN), the International Labour Organization (ILO), the Organization for Economic Co-operation and (OECD), and the G7, stakeholders encouraged ‘harmonized’ approaches and collaboration.

• For several years in Canada, stakeholders and Parliamentarians from all parties have expressed significant concerns regarding forced labour in the supply chains of Canadian companies and of goods imported into the country. There were five senate public and private members bills introduced on these issues in the last session of Parliament.
o Canada has been critiqued domestically and internationally, including by the U.S., for not taking a stronger approach to import ban enforcement and other measures to address exploitation in global supply chains.
o The Supply Chains Act (former Bill S-211 that is now law) is viewed by several stakeholders as a flawed and outdated legislation, with many calling for due diligence legislation that is consistent with the direction of more recent supply chain legislative frameworks in other jurisdictions.
o Prior to prorogation, the 2024 Fall Economic Statement (FES) announced the previous government’s intent to introduce legislation and create a supply chain due diligence regime that would require government entities and businesses to assess their international supply chains for fundamental labour rights risks and take action to mitigate them. In addition, the FES also announced the previous government’s intention to introduce legislative amendments to strengthen Canada’s ban on imports of goods produced with forced labour (with an increased onus on importers).

Forced labour import prohibition and other federal initiatives
• The CBSA is responsible for the enforcement of the import prohibition. Canada is still in a relatively early stage in the operationalisation of the forced labour import prohibition enforcement regime, being only the second country in the world to have put a ban of this nature in place. The U.S has had a forced labour ban in place for 90 years. Mexico’s ban came into force in May 2023.

• Under the current import prohibition, the Canada Border Services Agency (CBSA) uses research and analysis from various sources of information, including ESDC/Labour, to identify goods entering Canada that are suspected to have been produced by forced labour. Establishing that goods have been produced by forced labour requires significant research and analysis and supporting information. The risk analysis to establish the likelihood that a specific shipment contains goods produced with forced labour is made on a case-by-case basis, based on available information and analysis.

• In late 2024, the then Minister of International Trade hosted a virtual public consultation on potential measures to strengthen the forced labour import ban, building upon past consultations the Labour Program held on exploitation in supply chains in 2019, 2022, and 2023. GAC and CBSA are working with other departments in considering means of strengthening the ban, as was committed to in past Federal Budgets.

• Beyond supply chain legislation and the import ban, there are several other federal initiatives addressing global labour exploitation in which the Labour Program is involved, including:
o the inclusion of provisions on forced labour and child labour in Canada’s free trade agreements, as well as technical assistance projects in developing countries to help uphold obligations;
o CUSMA technical-level meetings among labour, border, and trade officials in the U.S., Canada and Mexico to advance collaboration on forced labour research and enforcement; and
o engagement on decent work, forced labour, labour exploitation in supply chains in the ILO and a variety of other international fora.

• In addition, Public Safety Canada leads work on the National Anti-Trafficking Strategy; Global Affairs Canada launched an updated Responsible Business Conduct Strategy; and Public Services and Procurement Canada has established expectations for suppliers and sub-contractors in federal procurement on upholding human rights.

Recent Media Coverage
• There has been a wide range of media coverage in recent years regarding forced labour and exploitation in global supply chains domestically and globally. Domestically, many stakeholders have called for strong supply chain legislation, and several have critiqued the Supply Chains Act. Media articles have brought attention to exploitation in various sectors, such as Canadian seafood supply chains.

• In addition, there has been significant media attention on the import ban, including comparisons with the US regime and its enforcement activity, particularly with respect to its presumptive approach regarding goods from Xinjiang, and concerns about shipments being blocked from the US and re-routed to other countries. This included, for example, a June 5, 2024 article published by the CBC describing US concerns with forced labour goods being re-routed to Canada after being blocked by the US. The article also cited Canadian MP John McKay as indicating that Canada’s lack of enforcement could become an irritant in the 2026 review of CUSMA.

• On September 11, 2024, the Globe and Mail reported that the Human Rights Action Group and the Uyghur Rights Advocacy Project (URAP) are petitioning the federal government to impose sanctions on eight Chinese companies over alleged rights violations, including forced labour and abuse of deckhands committed on board Chinese squid fishing vessels. URAP referred to Canada as a “dumping ground” for forced-labour products, in contrast to the U.S. The article also indicated that according to the Canada Border Services Agency “not a single shipment of goods made with forced labour has been blocked.”

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