In 2024, the new modern slavery law will require Canadian companies to publicly declare what they are doing about forced and child labor. However, it does not require any concrete measures and focuses primarily on a vital need in trading: protecting one's reputation.
Published at 12:01 am. Updated at 05:00.
Specifically, the law to combat forced and child labor in supply chains must apply from January 1st to companies with 250 employees or more, assets of at least $20 million or income of $40 million. All listed companies and government institutions will also be affected by default.
The organizations concerned must present their efforts to combat forced labor and child labor every year. “The report must be submitted to the minister no later than May 31 of each year and must also be published on the company’s website,” explains Jean-Guillaume Shooner, partner at Stikeman Elliott and international trade specialist. Federal corporations must also send the report to each shareholder at the same time as the financial statements.
In the event of a violation, the law also provides for the imposition of a maximum fine of $250,000 on the companies themselves, but possibly also on their managers or directors.
No specific measures required
Federal law does not set a “threshold” for determining whether a company’s efforts to combat forced and child labor are sufficient.
“There is no obligation to take any specific action in the supply chain,” says Paul Lalonde, partner at Dentons and international trade law specialist. Companies will have a “duty to say” what they do or don’t do, period. “It's perfectly legal to say, 'I'm not doing anything to combat child labor,'” says Alexis Langerfeld, a doctoral candidate at Laval University's Center for Economic Law Studies.
Since the document is available for anyone to view, a company making such a statement would still risk facing the consequences. And in principle, the Minister of Public Security could request certain information.
PHOTO MARTIN TREMBLAY, LA PRESSE ARCHIVE
Many foreign agricultural workers hired in Quebec are forced to work for a single employer by the permits they require.
The law could also give companies that source from Canada a break. The issue of closed work permits, for example, raises increasing questions about the freedom of will, particularly of agricultural workers who are forced to work for a single employer and face expulsion from the country if they quit. “Companies like Metro will certainly face questions,” says Claudia Rebolledo, a professor at HEC Montréal and a supply chain specialist.
Other laws go even further
The new law against forced and child labor is in line with a trend in Western countries that are gradually enacting similar regulations. However, some governments are going further.
Ivan Tchotourian, full professor at the Institute of Applied Ethics at Laval University, emphasizes that Germany does not allow companies to regulate themselves. “We definitely ask the company for a concrete plan,” he explains. We will define precise standards to be achieved, which Canada does not do. »
Consequences at customs
Canada had already introduced new border measures following the Canada-United States-Mexico Agreement, which was ratified in 2020 and was intended to replace the North American Free Trade Agreement (NAFTA). The new regulations include banning the import of goods produced using forced labor or discriminatory practices and including child labor in the definition of forced labor.
However, experts point out that Ottawa has only used this ban once to seize goods imported from China, namely clothing, which it ultimately returned to its importer after challenging it. In comparison, the United States seized goods totaling nearly $1 billion between June 2022 and April 2023 alone, according to an article by Borden Ladner Gervais.
Hence the idea of the new federal law: Since the government doesn't have much influence, it might as well force companies to make declarations about their supply chain.
Since the law does not require companies to take “proactive” measures to reduce or eliminate forced labor and child labor in their supply chains, the public nature of reporting is likely to play an important role in encouraging companies to take such measures in practice to take.
Jean-Guillaume Shooner, partner at Stikeman Elliott and international trade specialist
Ottawa already has a tool to shine a spotlight on companies that aren't doing enough in this area. The Canadian Corporate Responsibility Ombudsman is responsible for investigating complaints about human rights violations by domestic companies abroad.
The organization particularly investigated the cases of Levi Strauss, Walmart, Hugo Boss and Nike. He just announced the launch of an investigation into Guess and the faded jeans advocate's possible ties to Uyghur forced labor in China.
Nova Scotia seafood company High Liner has also been able to measure the reputational impact that importing goods from modern slavery can have.
Last October, a journalistic investigation by The Outlaw Project published in the Globe and Mail revealed that the seafood it imported came from a Chinese factory that employed Uighur forced laborers.
The government didn't need to get involved for High Liner to quickly cut ties with the company.
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25 million people worldwide are victims of forced labor, including 16 million in companies in sectors such as domestic work, construction or agriculture, 5 million victims of sexual exploitation and 4 million victims of official forced labor
Source: International Labor Organization