441-00839 (Business and trade)

The Government published the Labour exploitation in global supply chains: What We Heard Report (https://www.canada.ca/en/employment-social-development/programs/international-affairs/reports/what-we-heard-forced-labour-global-supply-chain.html) in March 2022, 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 share any additional feedback. Submissions were received from a range of organizations and individuals and the Government will continue to consider the results of consultations moving forward.

Parliament is actively engaged on this matter and there was unanimous support to have Bill S-211, An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff, studied by Committee.

The Government supports the principle of Bill S-211 and will look to strengthen and bolster the proposed legislation.

This is a complex endeavour that requires careful consideration of supply chain legislation appropriate to the Canadian context. It remains a relatively novel undertaking, and the effectiveness of various legislative models is yet to be determined. For that reason, we will continuously re-evaluate and reassess the steps we take on this matter.

Supply chain legislation is just one tool, among many, needed to address forced labour and other forms of exploitation. The Government also has in place a variety of other initiatives to prevent and address exploitation in global supply chains and to promote responsible business conduct (RBC) abroad.

For example, Canada is party to a number of conventions aimed at protecting human rights, including conventions addressing situations of child labour and forced labour. The Government continues to negotiate into Canada’s free trade agreements enforceable obligations to address child and forced labour. Trade sanctions or financial penalties can be imposed on free trade partners that do not live up to these obligations.

In addition, the Government 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.

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. The National Strategy is a multi-department horizontal initiative centred on prevention, protection, prosecutions, partnerships, and survivors’ empowerment. As part of this National Strategy, the Government of Canada is 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 in government procurement supply chains.

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. In addition, PSPC has implemented new anti-forced labour contract clauses to ensure that it can terminate contracts where there is credible information that goods have been produced in whole or in part by forced labour or human trafficking. The clauses also enable contract termination if goods do not clear customs because of breaches under the prohibition on the importation of goods produced with forced labour in the Customs Tariff. PSPC also recently awarded a contract to map international due diligence obligations for businesses to report on actions taken to address the risks of forced labour, human trafficking, and human rights violations in their supply chains. This research will inform ongoing activities designed to ensure that suppliers of goods and services apply the highest ethical and sustainability standards across their supply chains.

On January 12, 2021, in coordination with international partners, Canada announced measures in response to concerns about human rights violations in the People’s Republic of China involving members of the Uyghur ethnic minority and other minorities within the Xinjiang Uyghur Autonomous Region (Xinjiang). These include a specialized Xinjiang Integrity Declaration as a prerequisite for Canadian companies with business ties to the region to receive Trade Commissioner Service support; a business advisory on Xinjiang-related entities; enhanced advice to Canadian businesses; export controls; increased awareness-raising for RBC related to Xinjiang; and a study on forced labour and supply chain risks, which is available on Global Affairs Canada’s website.

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 on RBC, such as the United Nations (UN) Guiding Principles on Business and Human Rights (https://www.ohchr.org/sites/default/files/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf), the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises (https://www.oecd.org/daf/inv/mne/48004323.pdf), and the International Labour Organization Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (https://www.ilo.org/empent/Publications/WCMS_094386/lang--en/index.htm). To this end, Global Affairs Canada released its RBC Strategy in April 2022, which sets out priorities for the Government of Canada to support Canadian businesses active abroad – no matter their size, sector, or scope – 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.

In terms of access to dispute resolution, the Government of Canada supports Canada’s National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises and the Canadian Ombudsperson for Responsible Enterprise (CORE). The NCP is mandated to offer facilitated dialogue and mediation to all sectors on issues covered by the OECD Guidelines, including disclosure, labour issues, human rights, environmental issues, and bribery. The NCP can address complaints directed at the activities of multinational enterprises in Canada and the operations of Canadian multinational enterprises operating abroad. The CORE can review complaints of alleged human rights abuses by Canadian companies operating abroad in the mining, oil and gas, and garment sectors. The CORE also has the ability to receive complaints and undertake a review at its own initiative.

Canada expects that Canadian companies will participate in good faith in these dispute resolution processes. If a Canadian company has not acted in good faith during the course of or follow-up to a review process, both the NCP and the CORE can recommend the withdrawal of Trade Commissioner Service support and that Export Development Canada and the Canadian Commercial Corporation also withdraw future support. The CORE and the NCP work with complainants and companies to find a solution through fact-finding, discussion and mediation. The two mechanisms can offer effective and accessible alternatives to judicial processes, although they do not preclude a party from addressing the issues in other fora. 

The Government believes that a whole-of-government 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.