441-02183 (Business and trade)

The Government of Canada is committed to upholding human rights as well as labour and environmental standards. The Minister of Labour and Seniors, with support from the Ministers of Public Safety, Public Services and Procurement, as well as Export Promotion, International Trade and Economic Development, remains committed to introducing legislation to eradicate forced labour from Canadian supply chains. The Government of Canada is committed to helping ensure that Canadian businesses operating abroad do not contribute to human rights abuses.

In March 2022, the Government of Canada published the Labour exploitation in global supply chains:What We Heard Report, which provides a summary of past consultations on possible measures to address labour exploitation in supply chains. Stakeholders were invited to review the Report and to share feedback. Further, a multi-sectoral technical roundtable was held in October 2023 with a range of stakeholders to discuss supply chain due diligence legislation and measures to strengthen the import prohibition. The Government continues to consider the results of these consultations, as well as best practices and other inputs received during continued engagement with numerous civil society organizations, industry associations, foreign governments and other stakeholders.

On May 3, 2023, Members of Parliament passed Senate Public Bill S-211, Fighting Against Forced Labour and Child Labour in Supply Chains Act (the Act). The bill received royal assent on May 11, 2023, and came into force on January 1, 2024. The Act imposes an obligation on certain entities and government institutions to report publicly on the measures taken to prevent and reduce the risk that forced labour or child labour is used by them or in their supply chains. Public Safety Canada is responsible for the implementation of this Act. The Act also amends the Customs Tariff to allow for a prohibition on the importation of goods manufactured or produced, in whole or in part, by forced labour or child labour as those terms are defined in the Act.

The Government recognizes that the Act may serve as an important first step, however, more is needed. The Government of Canada committed, as part of the 2023 federal budget, to introduce legislation in 2024 to help eradicate forced labour from Canadian supply chains and to strengthen the import ban on goods produced using forced labour. The legislation will be strong, effective, and enforceable. For example, whereas the Act only requires entities to report on forced and child labour in their supply chains, government legislation would include due diligence measures to ensure they take action to eradicate it. 

Supply chain legislation is just one tool, among many, needed to address forced labour and other forms of exploitation. The Government of Canada also has in place a variety of other initiatives to prevent and address exploitation in global supply chains and to promote responsible business conduct abroad. For example, Canada is part of a number of conventions aimed at protecting human rights and works to negotiate into Canada’s free trade agreements enforceable obligations to address child and forced labour. Trade sanctions or financial penalties can also be imposed on free trade partners that do not live up to these obligations.

In addition, the Government of Canada introduced the prohibition on the importation of goods produced in whole or in part by forced labour, which came into force under the Customs Tariff on July 1, 2020. This implemented an obligation in the Labour Chapter of the Canada-U.S.-Mexico Agreement (CUSMA) and applies to all goods regardless of country of origin.

In January 2021, the Government of Canada also announced a suite of measures to address human rights violations in Xinjiang. These measures include a backgrounder on the human rights situation in Xinjiang, a business advisory cautioning Canadian businesses of the risks of supply chain exposure to entities engaging in human rights abuses, a study to raise awareness among Canadian companies of human rights and supply chain risks related to forced labour from the Xinjiang Uyghur Autonomous Region, enhanced advice to Canadian businesses regarding due diligence and risk mitigation in Xinjiang, as well as an Integrity Declaration on Doing Business with Xinjiang Entities (XID).

The XID requires Canadian companies to affirm that they are not knowingly sourcing products or services from a supplier implicated in forced labour or other human rights violations and commit to conduct due diligence on their suppliers in China to ensure there are no such linkages. Not collaborating in good faith could result in the withdrawal of trade advocacy support and future Export Development Canada financial support.

Furthermore, the Government’s National Strategy to Combat Human Trafficking enhances Canada’s efforts to combat human trafficking for the purpose of sexual exploitation and forced labour, both domestically and internationally. It is a multi-department horizontal initiative centred on prevention, protection, prosecutions, partnerships, and survivors’ empowerment. Within the National Strategy, the Government of Canada committed to promoting ethical corporate practices by encouraging industry partners to implement changes in their supply chains to prevent and reduce the risk of forced labour.

On the public procurement front, Canada has strengthened its contracting regime to ensure that federal suppliers adhere to the highest ethical standards and treat their workers with dignity. To this end, Public Services and Procurement Canada (PSPC) has updated its Code of Conduct for Procurement to include expectations for suppliers and their subcontractors on human and labour rights. The updated Code of Conduct now applies to all government of Canada contracts. In addition, PSPC has implemented anti-forced labour contract clauses to ensure that it can terminate contracts where there is credible evidence that goods have been produced in whole or in part by human trafficking, child labour, or forced labour. The clauses have been recently adapted to apply to Standing Offers and Supply Arrangements. Currently, PSPC is undergoing public consultations for its draft Policy on Ethical Procurement, which outlines departmental objectives and outcomes pertaining to ethical procurement, and signals the intention to develop ethical procurement activities, initiatives, and frameworks, including a human rights due diligence framework for suppliers. The Policy is part of an ongoing range of activities to ensure that suppliers of goods and services to the Government of Canada apply the highest ethical and sustainability standards across their supply chains.

At the September 2022 G7 Trade and Investment Ministers Meeting, G7 partners committed to strengthen cooperation and collective efforts towards eradicating the use of all forms of forced labour and child labour in global supply chains. This commitment includes measures that promote corporate due diligence, as well as working to further enhance predictability and certainty for businesses.

The Government of Canada expects Canadian companies operating abroad to abide by all relevant laws, to respect human rights in all their activities abroad, and to adopt best practices and internationally respected guidelines, such as the United Nations Guiding Principles on Business and Human Rights, the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, and the International Labour Organization Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy. To this end, Global Affairs Canada released its Responsible Business Conduct Abroad (RBC) Strategy in April 2022, which sets out priorities for the Government of Canada to support Canadian businesses active abroad – no matter their size or sector– to integrate leading responsible business practices into their operations, including throughout their supply chains and to help them mitigate risks. The Strategy strengthens Canada’s balanced approach to RBC, which includes preventative measures, legislation in select areas, and access to dispute resolution.

The Government of Canada provides two non-judicial mechanisms to address complaints about the conduct of Canadian companies abroad: Canada’s National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises and the Canadian Ombudsperson for Responsible Enterprise (CORE). The NCP can facilitate dialogue and mediation to help parties resolve issues concerning observance of the OECD Guidelines by multinational enterprises operating from Canada, in any sector. The OECD Guidelines cover a wide range of issues, including human rights, the environment, and labour relations, among others. The CORE can review complaints of alleged human rights abuses arising from the operations of Canadian companies active abroad in the mining, oil and gas, and garment sectors. The CORE can also undertake a review at its own initiative, as well as offer informal mediation services to help resolve complaints.

Canada expects that Canadian companies will participate in good faith in NCP and CORE processes. If a Canadian company has not acted in good faith during the course of or follow-up to a review process, the NCP or CORE can recommend the denial of future government trade support, including by the Trade Commissioner Service, and Export Development Canada. Both the NCP and CORE can offer effective and accessible alternatives to judicial processes, although engaging with the NCP or CORE does not preclude a party from addressing the issues in other fora. 

The Government believes that a comprehensive approach, including supply chain legislation, will be essential in addressing labour exploitation in Canadian supply chains. We look forward to working closely with Parliamentarians, stakeholders and international partners to strengthen Canada’s approach and global efforts to address forced labour and other forms of exploitation.