International Trade Committee on Dec. 4th, 2025

[Jacob Mantle, Conservative, York—Durham, ON]

I'm just asking why you did this.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

Jacob, is this the position of the Conservative Party, yes or no?

[Jacob Mantle, Conservative, York—Durham, ON]

At the defence committee this morning, the Minister of National Defence said the F-35 review was his file, and he said he was reviewing it “at the request of the Prime Minister”. Did the Prime Minister ask you to review it as well?

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

I'm in charge of industrial benefits for defence contracts. That's the role of Industry.

[Jacob Mantle, Conservative, York—Durham, ON]

You are reviewing the F-35 as well.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

For industrial benefits, of course. Yes, absolutely. This is why I think we didn't get enough and we need more, and I hope the Conservative Party is in favour of that. If not, we want to know.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We're moving on to Mr. Lavoie, please.

The floor is yours.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Madam Chair.

Good afternoon everyone. I'm sorry to participate virtually today, but it's not all bad because it means that I'm in my riding.

Good afternoon, Minister. I'm honoured by your presence today, and that of the other witnesses as well.

I'm going to ask two questions and then let you respond.

You know a bit about my background. I worked in the banking sector for 20 years, including in business financing. I've financed businesses in almost every sector of the economy, and I've noticed that every sector experiences ups and downs, in a cycle of sorts. Usually, businesses that performed better were the ones that invested when their sector was not doing so well. Then, when things got better, they always came out on top.

This relates to the current situation we're facing. It's pretty bad out there with the tariffs. Everyone agrees that what we're currently going through is completely out of the ordinary. However, for many Canadian businesses, it could be the ideal time to invest so that, when this crisis hopefully ends, they're the best in the market.

My first question is: How can Canada Economic Development for Quebec Regions support businesses through grants and investments so that they can use this opportunity to increase their productivity, among other things?

As you know, I represent the riding of Beauport—Limoilou. The Port of Quebec City is right in my backyard. You were also in Japan recently. I know people in Japan who tell me that companies over there want to do business with us because it's the right time to do so. I'm putting on my MP for Beauport—Limoilou hat for a moment because my riding has that critical infrastructure and amazing businesses.

Here's my second question: How can we help businesses in Beauport—Limoilou take advantage of our strategic infrastructure and of commercial opportunities in foreign markets? How can we leverage that?

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

Thank you, Mr. Lavoie.

With regard to your first question, we have a whole range of support programs. The main one is obviously the $5‑billion strategic response fund, which includes the former strategic innovation fund. Originally, the goal of this fund was to attract investments, especially from other countries, or to help Canadian businesses transition and adapt. Now, we decided to open that funding to businesses impacted by tariffs. So that $5‑billion fund is very important. It allows businesses in the steel and aluminum sectors, including some that are located near Quebec City, to start producing steel and aluminum to meet our domestic demand, especially in terms of defence. They can't do so right now, because the aluminum sector's business model is to send aluminum to the U.S. to be processed. That is part of the discussions I have with the major players in the aluminum sector and with smaller companies as well.

We're also helping businesses export their product, especially in the aluminum sector. For example, in the first quarter, Aluminerie Alouette exported 4% of its production to Europe. In the second quarter, it was 52%. That is all part of the programs that we have to support businesses affected by tariffs.

Big companies have access to the strategic response fund. For smaller ones, support is provided through Canada Economic Development for Quebec Regions. There's a fund for SMEs affected by tariffs. Part of that help is non-refundable, because—and this ties into Mr. Groleau's question—we know that small businesses are not always as financially secure as the bigger ones. There are other programs for the softwood lumber sector. I mentioned them when answering Mr. Savard‑Tremblay's question about softwood lumber.

I would conclude by mentioning that other countries are showing an interest in Canada. Canada's reputation is very good, particularly because of its ability to navigate the dynamics with the U.S. in a very difficult situation. Indeed, the main concern among western democracies is figuring out how to deal with the U.S. administration.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister. That ends our time.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you so much for the valuable information.

Thank you to your staff.

We will suspend for a moment while our other witnesses come to the table.

[The Chair, Liberal, Judy Sgro]

I call the meeting back to order. Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, September 18, the committee is resuming its study on Canadian supply chains, forced labour and related imports.

We have with us today, as an individual, Sabrina Bandali, partner and head of international trade and investment practice; Stephen Pike, partner; and Sean Stephenson, counsel.

Welcome to you all. We appreciate your taking the time to be with us today.

Ms. Bandali, I give the floor to you for up to five minutes, please.

[Sabrina Bandali, Partner and Head, International Trade and Investment Practice, As an Individual]

Thank you, Madam Chair and members of the committee. We appreciate the opportunity to appear before you.

I am speaking to you today in my personal capacity and not on behalf of my firm or any specific clients. That said, my views are informed by my experience in advising companies with respect to supply chain compliance, including companies that have faced detentions on grounds of possible forced labour in their supply chains.

While I cannot comment on the details of specific cases, these experiences have allowed me to observe first-hand some of the difficulties the design of our current law creates, based on tariff classification, from an enforcement and compliance perspective. I will focus my comments on explaining some of those challenges and the need to ensure that the obligations of importers are reasonable and practical.

Eradicating forced and child labour from supply chains is an important goal, but presently, importers are left without adequate support or clear expectations about what, concretely, they must do in order to confidently import goods into Canada. Parliament implemented our prohibition on importing goods made with forced or child labour, in whole or in part, by defining these goods as “prohibited goods” classified under tariff item 9897.00.00. However, the rules and compliance obligations that apply in the context of tariff classification create challenges when addressing concerns about the use of prohibited forms of labour in supply chains.

Tariff classification is classically analyzed in rem, meaning that it is based on the good itself, as it appears at the time of importation into Canada. Most commonly, this means that you can examine the good and determine its correct classification based on its physical characteristics, material composition or function. In most cases, when tariff classification is based on factors that are not evident from the good itself—conditional relief items, for example, that are based on a specific end use—the record-keeping regulations that we have explicitly state what documentation is required in order to prove eligibility.

However, establishing whether there is forced labour in supply chains presents different considerations. It requires information about the production and upstream sourcing of raw materials and components—which may be many degrees removed from the good that is imported into Canada. Because the legal mechanism used is tariff classification, this potentially creates a strict liability obligation that may not always take into consideration whether the non-compliance was wilful or whether the compliance burden was reasonable in the first place.

Importers may not know all of their suppliers' suppliers, let alone have access to reliable information about their labour practices. Supply chain information may be considered confidential and competitively sensitive, and upstream suppliers may be hesitant to disclose information and records to their customers. Effectively, the law has the potential to expose importers to legal risk, including possible criminal risk, as a result of conduct over which they may have little or no visibility, control or influence. In the early detention cases, we have seen this tension play out.

The CBSA identifies shipments for detention based on confidential intelligence about the alleged conduct of parties in the supply chain or allegations about an industry or the geography in which some goods are produced. The risks identified may not arise from the immediate supplier with which the importer has a direct relationship but from farther up the chain. If a CBSA member has a suspicion that goods are made with forced labour, they may detain the goods and notify the importer to demand information and documentation about the complete supply chain, all the way back to raw materials, within 30 days. The CBSA is not obliged to provide reasons for the detention, and in my experience, they have not disclosed what aspect of the supply chain led to the decision to detain.

Because of the nature and extent of information required, it may be a tremendous time- and resource-intensive undertaking for importers to trace each step of production, back to raw materials, for every component or material in every product imported into Canada. Doing so may require documents that are not in the importer's possession and that they have no legal right or commercial leverage to obtain. They may include records that importers do not presently have an express legal obligation to maintain under current regulations.

Some importers may be able to take reasonable steps to strengthen their contracts and require parties up the supply chain to provide information, but depending on the nature of the good and their business, they may not be able to establish a chain of custody traceable to the actual good imported or afford a compliance program of the scale required to do so.

Options for importers to formally mitigate their risk of enforcement action before an import occurs are limited since, as a matter of policy, the CBSA will not issue advance rulings for forced labour and child labour classification determinations. The importer bears all the due diligence burden and the legal risk. Furthermore, the CBSA does not currently publicize the information or investigation reports that it uses to detain shipments.

Let me conclude by saying that not giving importers a way to access information about which suppliers or supply chains are considered high risk or to obtain guidance from the government leaves Canadian importers with a significant information gap and undermines the policy goal of reducing forced labour and child labour worldwide.

I appreciate that members of the committee are considering various solutions to these challenges, and I'll just say that, if the government is going to introduce something like a presumption of denial entity list, it will be very important to create due process to allow stakeholders to provide information prior to listing, as well as to have the ability to appeal decisions and to apply to be delisted, particularly if the listing is based on unproven allegations or circumstantial public source evidence.

Thank you for the opportunity to appear before you, and I look forward to responding to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Bandali.

Mr. Pike, you have the floor.

[Stephen Pike, Partner, As an Individual]

Good afternoon, Madam Chair and members of the committee. It's an honour to have the opportunity to speak to you this afternoon and to answer your questions regarding Canadian supply chains, forced labour and related imports.

My evidence today, as my colleague had said, represents my own views, and I am here as an individual and not representing my law firm, Gowling WLG, its clients or any third parties. I'm a business lawyer based in Toronto, and I serve a wide variety of clients headquartered in Canada, the United States, Europe and Asia. I've worked for more than 10 years on issues pertaining to forced labour and child labour in supply chains, going all the way back to a project I initiated in 2015 to draft model Canadian business principles on forced labour, labour trafficking, and illegal and harmful child labour with the Canadian Corporate Counsel Association. Those model Canadian business principles were adopted by the Canadian Bar Association in February 2016.

In the next few minutes, I want to provide some important context that overshadows our evidence today. I'd like to speak briefly about forced labour and the scope of exploitation of people at the far end of supply chains, many with no way out.

According to the International Labour Organization, there are 27.6 million people trapped in forced labour; they generate exploitation that results in something like $236 billion U.S. in profits every year. At the same time, there are nearly 138 million children suffering in child labour worldwide, 54 million of whom are in hazardous work that is likely to harm their health, their safety or their morals.

I'd like to say that, unfortunately, forced labour exploitation is seen as a dynamic issue. For example, I'll draw your attention to a recent publication by the ILO pertaining to forced labour. Last month, on November 18, the ILO published a revised edition of its 2012 advisory regarding the indicators of forced labour. The revised edition adds a new provision on this exploitation through forced labour. It's a provision on state-imposed forced labour.

State-imposed forced labour can take various forms, including compulsory labour as a form of political coercion or punishment for persons expressing political views or views opposed to the established political, social and economic system. These indicators of forced labour are designed to support frontline actors, such as U.S. Customs and Border Protection in detecting potential victims of forced labour. For example, the CBP lists the relevant indicators of forced labour in every press release announcing the issue of a withhold release order.

I would be remiss if I didn't refer to the Fighting Against Forced Labour and Child Labour in Supply Chains Act, which, as you know, came into force on January 1, 2024. I note that the supply chains act, with its inclusion of the amendment to the Customs Tariff to prohibit the importation into Canada of goods mined, manufactured or produced in whole or in part with child labour, and its imposition of reporting requirements on federal government institutions, is globally unique in its approach to addressing risks of what many call modern slavery.

The steps taken by reporting entities to prevent and reduce the risk of forced labour and child labour in supply chains and business operations have been disclosed in almost 11,500 reports filed in the first two years of the supply chains act. In my view those steps may be impacting the fight against forced labour and child labour in supply chains in a very positive way. I'd be happy to discuss that further if you wish.

Thank you very much for permitting me to provide my opening statement.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Pike.

Go ahead, Mr. Stephenson.

[Sean Stephenson, Counsel, As an Individual]

Thank you, Madam Chair.

Good afternoon to everyone here. It's a pleasure to be here with you today to talk about the very important issue of forced labour. Similar to my colleagues, I will be expressing my own views.

I am counsel at Dentons Canada LLP. For the past two years, I have chaired the Canadian Bar Association's section of international law, and I am the past chair of its working group on modern slavery practices. This experience has informed my views such that I've been able to speak with lawyers throughout the country on this issue.

First of all, I'm going to say that I agree with many of the comments made by my colleague Sabrina, who very thoroughly described the process and the issues. I do not intend to revisit them. I think they've been well established.

I will focus my presentation on a couple of different things. The first is the existing prohibitions that we have, and the second is the bill that has been tabled and some of its potential implications.

First, on the prohibition that we have, I'd like to talk about enforcement and transparency. I think this committee has been well briefed on the CBSA's enforcement measures, and you have the numbers on enforcement. You have also discussed transparency with the CBSA. The numbers on enforcement speak for themselves. There has not been a particularly large amount of enforcement coming from the CBSA, and we don't have a real, transparent view of what those numbers look like in real time, save for committee appearances like the ones we had last week.

On transparency and numbers, transparency can act as a method of deterrence. When importers know that the CBSA is actively looking at these types of issues and that those types of numbers are being made public, this is a form of deterrence and encourages compliance. I would encourage the committee to really take that to heart, because those are numbers that we are frequently asked about as counsel: “Have there been any detentions?” When we say we don't have any knowledge of this and none of it is public, this does not help in enforcement or compliance related to these serious issues.

Second, in relation to guidance, I think this committee is well aware that there has been guidance on forced labour, which was initially issued by the CBSA in 2021. We are still waiting for a final version of that guidance. The CBA modern slavery working group made submissions to the modern slavery task force in January last year, and we simply never heard back. Engaging experts on these types of issues, on which we believe we can significantly contribute, is an important point.

On that point, I would note that for the Supply Chains Act, or Bill S-211, we have had a different experience with Public Safety Canada. My colleague Stephen and I are part of the external counsel panel that it has established. Essentially, it canvassed not only our views on this as individuals, but the views of a large number of lawyers across the country. This has resulted in positive achievements, particularly in a significantly revised guidance document from Public Safety Canada that has addressed a lot of the concerns, both legal and practical, that the importing community has faced.

Those were a few initial comments on the current state of the import ban. Now I have a couple of comments on the bill that has been proposed, Bill C-251, which creates the rebuttable presumption.

First and foremost, based on our experience with the supply chains act, it is critical to have clarity not only in the law but also in the guidance. This is one thing we lacked when Bill S-211 became live. There was no significant guidance that addressed the concerns the reporting community had. To the extent that the bill moves forward, it needs to move forward with clarity and guidance. Our counterparts to the south have very clear guidance documentation for what is expected from importers, including the documents they need to have and the standards they need to meet. The law is fine as written, but it needs to be supplemented with regulations or very clear guidance.

There is an open question of whether we need more legislation. I think Canada has a knack for potentially trying to legislate itself out of enforcement problems, but I will leave that open for the committee to discuss.

Second, I would ask, what would the impact be of this type of bill? In my view, the impact would potentially be threefold.

First, it would likely cause large importers to review their compliance and diligence functions. That's potentially a good thing. We would have a little bit more internal policing from our large importers here in Canada. Many folks who import into both Canada and the United States have already gone through that process, but I think we would see it again here.

Second, there would be a clear mandate for the CBSA to review additional shipments. The number of investigations would likely go up. This is potentially a positive thing.

Third, we would need to consider the implications of the act, potential act or bill against section 15 and section 155 of the Customs Act, which have a positive obligation to disclose the fact that you have or might know of forced labour goods in your possession. Also, if you have them in your possession, it can cause a penalty. What does creating a presumption in law do to those obligations, not only for importers but also for regular Canadian businesses down the chain?

I'll leave my comments there for now, but I'm happy to take any questions.

[The Chair, Liberal, Judy Sgro]

Thank you all very much. It's much appreciated.

Mr. Mantle, go ahead for six minutes, please.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you, Madam Chair.

Thank you to our witnesses for appearing.

We are all partisans around this table, but let no one say that I am not actually interested in this issue. That's why we have sought out these experts, who I will say are probably the most knowledgeable in Canada on these issues.

[The Chair, Liberal, Judy Sgro]

We've gotten good information already.

[Jacob Mantle, Conservative, York—Durham, ON]

Yes. I'm very thankful for their testimony.

I think we learned more from you three than we did from the CBSA, and that's part of the problem with this issue. In fact, I put section 115 to the CBSA when they were here, and they had no answer for me on the obligation...that it's a violation to possess goods—just have them in your possession—that are illegally imported. They had no answer for that.

I want to pick up on the transparency issue with the process because it's been raised by a lot of members. Of course, the natural comparison is the United States. If you go on the CBP website, you can look up the dashboard and you can see how many shipments have been interdicted, what their value was, where they came from and generally what kind of products they were. You can download an Excel sheet and look at what entities are on the list. It seems as though the CBSA is just allergic to this type of transparency.

I have two questions.

What's your experience in getting information from the CBSA for your clients? Do we need more transparency from the CBSA? Do you have any recommendations that the committee might make on that issue to the House or to the agency itself?

Whoever wants to can start, but I'd like to hear from each witness.

[Sabrina Bandali]

As I mentioned in my remarks, in detention situations, there was no disclosure of the reason for the detention or information on what aspect of the supply chain was problematic. The difficulty this creates for importers is that you can't run in all directions at the same time. Having some information to guide how you're going to devote your resources is very important.

Do my colleagues want to chime in?

[Sean Stephenson]

As a general matter, we have had difficulties obtaining information from the CBSA. We are cognizant that there is a lot of confidential data for every particular importer.

We are talking about basic numbers of how many.... You shouldn't have to file an access to information request to know how many shipments have been stopped. Broad numbers and things like that are helpful.

We get those questions as counsel, not only those on what the law is. Importers look at what the risk is. How much do they need to put into their compliance program? Having those types of numbers would be helpful to share with our clients, to say it's being actively looked at or that they're not doing anything.

There's a meaningful risk gauge that I think a lot of clients go to when they're designing compliance programs.

[Stephen Pike]

I don't have anything to add to what my colleagues have said.