John McKay, a member of the Canadian parliament, is pushing his country to be more aggressive when it comes to forced labor enforcement, and expressed support in strengthening multilateral coordination with other nations, especially the U.S.
He emphasized the importance of adopting regulatory standards similar to those in the U.S. and being more effective at flagging and detaining risky shipments to avoid conflict in future trade negotiations with the U.S. McKay is an advocate for anti-slavery measures in Canada who helped enact Canada’s forced labor law – the Fighting Against Forced Labour and Child Labour in Supply Chains Act, also known as the Supply Chain Act.
“The United States is far and away our most important trading partner, and we need to at least adhere to the standards that the American authorities have,” McKay said during a webinar hosted by Kharon on Nov. 4, which focused on Canada’s Supply Chains Act.
He emphasized the importance of adopting regulatory standards similar to those in the U.S. and being more effective at flagging and detaining risky shipments to avoid conflict in future trade negotiations with the U.S. McKay is an advocate for anti-slavery measures in Canada who helped enact Canada’s forced labor law – the Fighting Against Forced Labour and Child Labour in Supply Chains Act, also known as the Supply Chain Act.
“The United States is far and away our most important trading partner, and we need to at least adhere to the standards that the American authorities have,” McKay said during a webinar hosted by Kharon on Nov. 4, which focused on Canada’s Supply Chains Act.
“I think we just need to be more aggressive at the border, because when negotiations come up, you can pretty well guarantee that our American interlocutors will raise this as a point of contention during the re-negotiation of CUSMA [Canada-United States-Mexico Agreement],” he added.
The Act that McKay sponsored in the House of Commons, which went into effect on Jan. 1, requires companies to publicly disclose the steps they have taken to reduce or prevent the use of forced labor and child labor in their supply chains.
In 2021, the U.S. passed the Uyghur Forced Labor Prevention Act (UFLPA), which went into effect in 2022. The law applies a rebuttable presumption of forced labor on goods produced in Xinjiang and imposes sanctions on entities that participate in or benefit from forced labor in China.
Unlike the UFLPA, the Canadian law does not specifically target China; instead, it addresses forced labor more broadly.
Since the UFLPA’s implementation, U.S. Customs and Border Protection (CBP) has detained and inspected more than 9,000 shipments valued at over $3.5 billion. So far, 78 entities have been added to the UFLPA entity list.
The U.S. figures significantly surpass shipments detained by Canadian authorities. According to media reports, the Canada Border Services Agency (CBSA) has intercepted over 50 shipments since 2021 due to suspicions that the products were made with forced labor, though most of those shipments were eventually allowed in.
“At this point, we don’t have a good story to tell,” McKay said, referring to future trade negotiations between Canada and the U.S. regarding forced labor enforcement.
Stephen Pike, a corporate and Environmental, Social, and Governance (ESG) law partner at Gowling WLG and panelist at the webinar, highlighted a key challenge Canada faces in addressing forced labor violations. He pointed out that Canada lacks the resources and enforcement powers that the U.S. has to effectively tackle these issues.
In 2021, the U.S. passed the Uyghur Forced Labor Prevention Act (UFLPA), which went into effect in 2022. The law applies a rebuttable presumption of forced labor on goods produced in Xinjiang and imposes sanctions on entities that participate in or benefit from forced labor in China.
Unlike the UFLPA, the Canadian law does not specifically target China; instead, it addresses forced labor more broadly.
Since the UFLPA’s implementation, U.S. Customs and Border Protection (CBP) has detained and inspected more than 9,000 shipments valued at over $3.5 billion. So far, 78 entities have been added to the UFLPA entity list.
The U.S. figures significantly surpass shipments detained by Canadian authorities. According to media reports, the Canada Border Services Agency (CBSA) has intercepted over 50 shipments since 2021 due to suspicions that the products were made with forced labor, though most of those shipments were eventually allowed in.
“At this point, we don’t have a good story to tell,” McKay said, referring to future trade negotiations between Canada and the U.S. regarding forced labor enforcement.
Stephen Pike, a corporate and Environmental, Social, and Governance (ESG) law partner at Gowling WLG and panelist at the webinar, highlighted a key challenge Canada faces in addressing forced labor violations. He pointed out that Canada lacks the resources and enforcement powers that the U.S. has to effectively tackle these issues.
“They [Canadian enforcement authorities] don’t have the powers, at the moment, to replicate what is being done by Customs and Border Protection in the U.S.,” Pike said.
“When you look at the numbers and the dollar value of the goods that are being detained by the U.S. … they're just completely at odds with the Canadian experience,” Pike added.
He also suggested that the Canadian government should adopt legislation to level the playing field in cross-border enforcement between Canada and the U.S.
McKay reiterated his plans to introduce legislation that would impose a reverse onus approach on jurisdictions with a high risk of forced labor, such as Xinjiang, which he compared to the UFLPA in the U.S.
McKay and Pike’s remarks follow U.S. lawmakers’ increasing calls for Canada and Mexico to step up their forced labor enforcement.
In September, a group of bipartisan lawmakers sent a letter to officials in the U.S., Canada, and Mexico urging them to strengthen existing forced labor regulations, and requested greater collaboration between the three countries to prevent tainted goods from entering North America.
The lawmakers suggested that the UFLPA “can serve as a model” for similar laws in Canada and Mexico.
“We urge parties to the USMCA [United States-Mexico-Canada Agreement] to utilize existing information-sharing agreements to stop the transfer of forced labor products as well as identified re-export or transshipment schemes,” the lawmakers said in the letter.
He also suggested that the Canadian government should adopt legislation to level the playing field in cross-border enforcement between Canada and the U.S.
McKay reiterated his plans to introduce legislation that would impose a reverse onus approach on jurisdictions with a high risk of forced labor, such as Xinjiang, which he compared to the UFLPA in the U.S.
McKay and Pike’s remarks follow U.S. lawmakers’ increasing calls for Canada and Mexico to step up their forced labor enforcement.
In September, a group of bipartisan lawmakers sent a letter to officials in the U.S., Canada, and Mexico urging them to strengthen existing forced labor regulations, and requested greater collaboration between the three countries to prevent tainted goods from entering North America.
The lawmakers suggested that the UFLPA “can serve as a model” for similar laws in Canada and Mexico.
“We urge parties to the USMCA [United States-Mexico-Canada Agreement] to utilize existing information-sharing agreements to stop the transfer of forced labor products as well as identified re-export or transshipment schemes,” the lawmakers said in the letter.
Our expert panelists review the regulatory framework and discuss steps being taken to reduce forced labor exposure. Click to watch the webinar on-demand.
