OTTAWA — A new law has compelled Canadian companies to confront a troubling reality regarding forced labour within their supply chains, and the early results are indeed concerning.

In Spring 2023, Liberal MP John McKay championed the Fighting Against Forced Labour and Child Labour in Supply Chains Act, a significant legislative move that mandates larger companies to publicly disclose any identified risks of forced labour and the measures they are taking to address these issues. As a result, many businesses are beginning to reevaluate their supply chain practices.

Major grocery retailer Loblaws has already submitted their report, which suggests that while they did not discover specific instances of forced labour, they are aware of the potential risks that warrant further investigation. The company has initiated a groundbreaking study focusing on broccoli and cauliflower farms across North America, aiming to uncover any underlying human rights abuses. The report from Loblaws emphasizes the importance of understanding the potential impacts on human rights and developing solutions to mitigate any identified risks.

Empire Company Limited, which operates brands such as Sobeys, Safeway, and FreshCo, has also recognized the need for vigilance in their sourcing practices. They have committed to ensuring that 100% of the palm oil used in their in-house products is sourced from sustainable suppliers, addressing concerns related to both forced labour and environmental destruction.

The issue of forced labour is particularly insidious, often hidden deep within the supply chain through specific components produced under exploitative conditions. In light of this, clothing retailer Lululemon has announced a thorough examination of the role of migrant workers in their supply chains, particularly in countries like Japan, Jordan, and Thailand, indicating that this demographic is especially vulnerable to exploitation.

In a recent statement, Lululemon has pledged that migrant workers will not be burdened with fees, a common practice that traps them in cycles of debt. The company has intervened in cases where suppliers have failed to pay workers for their full hours, illustrating an ongoing commitment to ensuring fair labor practices.

Even corporate giants like Amazon are not without blemish. The company reported issues with a supplier in Saudi Arabia, resulting in reimbursements exceeding $1.9 million USD to over 700 workers for recruitment fees improperly charged to them.

As of late 2023, it has been reported that approximately 38% of companies have acknowledged risks associated with forced labour, marking a significant step towards transparency. MP McKay believes that increasing awareness is vital to instigating real change within corporate practices.

While McKay has announced plans to retire, he expressed a desire for future oversight of these reports to transition to the Canadian Ombudsperson for Responsible Enterprise, a body capable of ensuring compliance and addressing any emerging complaints against companies operating abroad.

In addition to the ethical concerns surrounding forced labour, there are real economic implications for Canada’s trade relations, particularly with its southern neighbor. Some U.S. lawmakers have suggested that Canada must bolster its regulations to prevent the rerouting of goods linked to forced labour concerns from entering the market. Failure to act decisively could lead to serious trade ramifications if Canada is perceived as a conduit for "slave products."

As these new regulations take effect, the landscape of corporate responsibility in Canada is shifting, leaving consumers and investors waiting to see how companies will adapt to these revelations and the impact it will have on their operations moving forward. The fundamental question remains: will this legislation ignite substantial changes in labor practices, or will it merely scratch the surface of a much deeper issue? Stay tuned as we continue to follow this developing story.