Modern slavery is an umbrella term that encompasses practices of forced labour, including human trafficking, and debt bondage [1]. Based on current research by the International Labour Organization, there are 24.9 million people in forced labour slavery around the world [2]. Women and girls are disproportionately affected by forced labour, accounting for 99% of victims in the commercial sex industry and 58% in other sectors [3].
In this article, we outline the recent and forthcoming measures on modern slavery in Canada, including:
- The impact of the Canadian-United States-Mexico Agreement (“CUSMA”);
- Prime Minister Justin Trudeau’s mandate letter to Canada’s Minister of Labour; and
- The development and status of Canada’s modern slavery legislation including 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 (“Bill S-211”) and Bill C-243, An Act respecting the elimination of the use of forced labour and child labour in supply chains (“Bill C-243”).
The Impact of CUSMA
CUSMA, the successor to the North American Free Trade Agreement (“NAFTA”) came into effect on July 1, 2020. CUSMA’s Labour Chapter prohibits the importation of goods produced in whole or in part by forced or compulsory labour, including forced or compulsory child labour. CUSMA parties (i.e., Canada, the United States of America, and Mexico) agreed to cooperate on the identification and movement of goods produced by forced labour, and to adopt and maintain legislation relating to eliminating all forms of forced or compulsory labour.
Pursuant to its CUSMA obligation, Canada amended the Customs Tariff [4] to allow for the issuance of regulations prohibiting the commercial importation of goods that are mined, manufactured or produced wholly or in part by forced labour. Companies are well advised not only to monitor the application of the Customs Tariff and the issuance of any regulations pertaining to forced labour but, more fundamentally, to gain a better understanding of the labour and human rights practices associated with their supply chains.
The Mandate Letter to the Federal Minister of Labour
Canada’s commitment to eliminating all forms of modern slavery as a CUSMA party appears to be reflected in the Prime Minister’s Mandate Letter to Canada’s Minister of Labour Seamus O’Regan.
On December 16, 2021, Minister O’Regan was specifically mandated by the Prime Minister to “work with the Minister of Public Safety, the Minister of Public Services and Procurement, and the Minister of International Trade, Export Promotion, Small Business and Economic Development to introduce legislation to eradicate forced labour from Canadian supply chains and ensure that Canadian businesses operating abroad do not contribute to human rights abuses.” [5]
At this time, however, Canada has not yet adopted government-sponsored modern slavery legislation. Instead, Bills S-211 and C-243, which are intended to fight the use of forced labour and child labour by corporations in their supply chains and which were introduced independently by a Canadian Senator and a Member of Parliament, as opposed to being sponsored by the Canadian government, are currently being considered in the Senate and the House of Commons (respectively).
Bill S-211
Senate public Bill S-211 was introduced by Sen. Hon. Julie Miville-Dechêne in the Senate on November 24, 2021. Bill S-211 aims to impose supply chain reporting obligations on certain Canadian companies and government institutions in the interest of transparency.
In its current iteration, Bill S-211 would apply to entities that produce, sell or distribute goods in Canada or abroad, import into Canada goods produced abroad, or controls an entity engaged in the aforementioned activities.
An “entity” is defined in Bill S-211 as a corporation, trust, partnership or other unincorporated organization that
- Is listed on a stock exchange in Canada;
- Has a place of business in Canada, does business in Canada or has assets in Canada, and meets at least two of three possible financial or employment thresholds for one of the two most recent financial years:
- It has at least $20 million in assets,
- It has generated at least $40 million in revenue, and
- It employs an average of at least 250 employees; or
- Is prescribed by regulations.
If enacted in its current form, Bill S-211 would also apply to federal government institutions that produce, purchase or distribute goods in Canada or elsewhere.
The entities and government institutions to which Bill S-211 would apply if enacted without amendments would be required to file an annual report with the Minister of Public Safety and Emergency Preparedness. Annual reports would be made available to the public through an online registry maintained by the Minister. Annual reports would be required to include information about the entity or government institution with respect to:
- Its structure, activities and supply chains;
- Its policies and due diligence processes in relation to forced labour and child labour;
- The parts of its activities and supply chains that carry a risk of forced labour or child labour being used and the steps it has taken to assess and manage that risk;
- Any measures taken to remediate any forced labour or child labour;
- The training provided to employees on forced labour and child labour; and
- How the entity or government institution assesses its effectiveness in ensuring that forced labour and child labour are not being used in its activities and supply chains.
Reporting entities or individuals who fail to comply with the provisions of Bill S-211 or who knowingly make a false or misleading statement would be subject to fines of up to $250,000. The directors, agents, mandataries or officers of the offending entity could also be held personally liable if they ordered or authorized the infringement or consented to or participated in it.
Currently, Bill S-211 is being considered by the Standing Senate Committee on Human Rights after passing First and Second Readings on November 24, 2021 and December 14, 2021, respectively.
Bill C-243
Private Member’s Bill C-243 was introduced in the House of Commons by Marcus Powlowski (Member of Parliament for Thunder Bay—Rainy River) on February 8, 2022 and parallels several of the provisions in Bill S-211.
If passed in its current incarnation, Bill C-243 would apply to “entities” as they are defined in Bill S-211, but not to government institutions. Bill C-243 nonetheless provides for amendments to the Department of Public Works and Government Services Act to require the Minister of Public Works and Government Services to prevent or reduce the risk that material and services acquired by government departments are derived from forced or child labour. The Minister would also be required to report annually to Parliament on the risk mitigation measures taken in the year prior.
Bill C-243 provides for the same annual reporting requirements as Bill S-211. Unlike Bill S-211, however, Bill C-243 would also create a continuing obligation to update the information disclosed in an entity’s annual report and submit a revised report as soon as new and relevant information is available.
Similarly to Bill S-211, reporting entities who fail to comply with the provisions of Bill C-243 or who knowingly make a false or misleading statement would be subject to fines of up to $250,000. The directors, agents, mandataries or officers of the offending entity may also be held personally liable if they ordered or authorized the infringement or consented to or participated in it.
Bill C-243 is awaiting Second Reading after passing First Reading on February 8, 2022.
Conclusion
Critics of Bills S-211 and C-243 have pointed out that the bills would merely require companies to report on, rather than redress, the detection of modern slavery in their supply chains. However, complaint mechanisms with respect to specific industries are already available through the Canadian Ombudsperson for Responsible Enterprise. In addition, the public reporting requirements set out in these bills could begin to align Canada with similar legislative efforts made in other jurisdictions (see, e.g., the United Kingdom’s Modern Slavery Act, 2015, the California Transparency in Supply Chains Act (2010), France’s Corporate Duty of Vigilance Law, and Australia’s Modern Slavery Act).
As Canada moves closer to enacting modern slavery legislation, Canadian businesses should proactively assess their global supply chains and ensure they clearly understand their suppliers’ production and labour processes.
UPDATE (June 2, 2022): On June 1, 2022, the House of Commons voted unanimously in favour of sending Senate Bill S-211 to committee. Federal Labour Minister Seamus O'Regan ensured government backing for the bill. In light of the significant level of support for Bill S-211 from government and legislators, Canadian businesses that rely on international supply chains are strongly encouraged to follow the progress of Bill S-211 through the legislative process.
Disclaimer: This article provides only general information about legal issues and developments, and it is not intended to provide nor does it provide specific legal advice or a legal opinion. The views expressed in this article are the authors’ alone, and they are not the views of their employer.
REFERENCES
[1] https://www.ilo.org/global/topics/forced-labour/definition/lang--en/index.htm, .
[2] https://www.ilo.org/global/topics/forced-labour/lang--en/index.htm
[3] https://www.ilo.org/global/topics/forced-labour/lang--en/index.htm
[4] SC 1997, c 36 [Customs Tariff].
[5] https://pm.gc.ca/en/mandate-letters/2021/12/16/minister-labour-mandate-letter
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