Canada to introduce new law to address forced labour risks in global supply chains

The Canadian Government has announced its plans to create a new supply chain due diligence regime.

This will require businesses and the government to scrutinise their global supply chains for labour rights violations and take action to address these risks.

A new oversight agency will be created to ensure ongoing compliance.

In parallel, the government has also announced plans to strengthen Canada’s forced labour import ban, putting the onus on importers to show their supply chains are free from forced labour.

Canadian businesses and governments currently operate under a reporting-only framework established by the Fighting Against Forced Labour and Child Labour in Supply Chains Act (2023).

While this requires companies to report on actions they are taking, the proposed due diligence regime goes further by mandating proactive measures to combat forced labour in supply chains.

It is unclear how the proposed legislation will interact with the existing reporting framework.

This change aligns with the Global Slavery Index (GSI) finding that nearly two-thirds of forced labour cases are linked to global supply chains.

The law is critical to ensure Canadian entities take responsibility for the human rights risks associated with the goods they produce or import.

Canada imports over CAD27 billion worth of products annually at high risk of being made with forced labour.

Electronics count for more than half the imports, followed by garments, gold, textiles, and sugarcane.

Although Canada is one of the few countries with a forced labour import ban, enforcement has been minimal.

The government has recognised this gap with plans to strengthen its enforcement regime.

A robust supply chain due diligence law would complement this strengthened import ban, ensuring that companies proactively conduct due diligence to ensure goods entering Canada are not made with forced labour.

A comprehensive due diligence law would not only protect vulnerable workers but also empower businesses to address risks responsibly.

By mapping supply chain risks and taking genuine action to mitigate, remedy and prevent these risks, companies can demonstrate compliance and provide evidence that their products are not linked to forced labour.

Introducing a supply chain due diligence law and enhancing the enforcement of its forced labour import ban gives Canada the opportunity to be a global leader in combating modern slavery.

This would send a powerful message that protecting human rights is a priority for both businesses and governments.