Written By Sabrina A. Bandali, Alison FitzGerald, Jessica Horwitz, George Reid, Laura Schwartz and Kathleen Wang

Canada has opened a 30-day consultation on potential measures to increase the effectiveness of its existing import prohibition on all goods mined, manufactured or produced, wholly or in part, by forced labour from being imported in Canada. Submissions are due by November 15, 2024.

Canada introduced a prohibition on importing goods mined, manufactured, or produced—in whole or in part—with forced labour in 2020 as part of its implementation of the Canada-United States-Mexico Agreement (CUSMA). Canada’s Supply Chains Act expanded this import ban to also prohibit the importation of goods made with child labour as of January 1, 2024. Since introducing the ban, Canada has faced criticism for a lack of publicly reported enforcement actions, including detentions or seizures of goods believed to be produced with prohibited labour.

While there have been a number of detentions by the Canada Border Services Agency (CBSA) within the last year, the CBSA has yet to fully articulate its policies and approach to enforcement. Among the practical and legal challenges presented by the current Canadian import ban is a gap between the mandatory records that importers must maintain under existing customs regulations and the evidence that is relevant and probative to establishing the labour practices used by various suppliers in the supply chain for the goods eventually imported into Canada. Moreover, the Canadian government has not defined particular regions or entities that it considers to be associated with a high risk of forced labour and does not have a direct equivalent to the United States Customs and Border Protection (US CBP) Withold Release Order (WRO) process which puts the importing community on notice of products, suppliers or supply chains that are suspected to be tainted by prohibited labour practices.

The current consultation seeks input from stakeholders on the benefits and risks of addressing some of these challenges through the following possible measures:

• publishing a list of goods at risk of forced labour, informed by the International Labour Organization’s forced labour indicators and definitions and supplemented by other sources of information (the List);
• requiring that importers provide supply chain “minimum traceability” documentation for goods on the List;
• changing the cost-recovery model associated with the detention, removal, abandonment, and/or forfeiture of goods deemed to be made by forced labour to make the importer responsible the payment of all such costs;
• creating a streamlined mechanism for importers to dispute denied entry decisions; and
• strengthening the legislative and regulatory mechanisms for information collection/sharing, enforcement, and disposition, including enhanced collaboration and cooperation with the United States and Mexico to prevent transshipments.

These are potentially far-reaching changes that will have a significant impact on the operations, record-keeping, contractual obligations of, and legal risks faced by participants in supply chains of goods imported into Canada. It remains to be seen whether such changes would also apply in connection with the current import prohibition in respect of goods mined, manufactured, or produced, wholly or in part, by child labour.

The consultation particularly asks stakeholders to address the following questions:

• What do you view as the most effective way to improve the current import ban? Which measures would you prioritize?
• Do you have suggestions for tools and sources of information to identify and address risks in supply chains, that could be utilized in the creation of a goods at-risk list?
• What negative effects do you anticipate on workers and industries should the government proceed with some of the measures to strengthen the ban? What are your suggestions to mitigate those risks?

The public consultation is an important opportunity for stakeholders to influence the measures that the Government of Canada may introduce to promote compliance with Canadian and international human rights norms in supply chains.

Next Steps

The consultation period opened on October 17, 2024, and is expected to remain open until November 15, 2024.

For advice and assistance in understanding your supply-chain risks and best practices for compliance, please contact a member of the Bennett Jones International Trade and Investment group.