The Hollow Middle: What Canada's Supply-Chain Accountability Rebuild Removes

THE BRIEF

On 11 June 2026, Canada announced the elimination of the Canadian Ombudsperson for Responsible Enterprise, the only federal body dedicated to investigating human rights allegations against Canadian companies abroad, with at least 36 complaints awaiting decisions [4]. The next day it tabled Bill C-35, a border bill to strengthen the forced labour import prohibition [10].

The disclosure statute left standing has produced filings rather than consequences. Participation fell from 5,795 reports in the first cycle to 4,313 in the second, 91% of filers stated that remediation did not apply to them, and the 2025 annual report records no orders and no charges under the Act [1][2].

The border record the new bill must overcome is a single publicly confirmed interception since July 2020, subsequently released [6][7]. Over the same period, United States authorities detained 16,755 shipments valued at nearly USD 3.7 billion [9].

Accountability regimes perform three functions: disclosure, investigation, and interdiction. Canada now operates the first without consequence and is rebuilding the third, while the function that connects them has lost its only dedicated owner.

I. AN INVESTIGATOR RETIRED MID-CASELOAD

The Canadian Ombudsperson for Responsible Enterprise was established in 2019 to investigate allegations of human rights abuse by Canadian garment, mining, and oil and gas companies operating abroad [4]. At a press conference on 11 June 2026, Prime Minister Mark Carney said his government had eliminated the office months earlier because it considered the agency ineffective, pointing to a record of only one investigation conducted in seven years [5]. Global Affairs Canada framed the closure in administrative terms: a decision had been taken to permanently streamline the ombudsperson's work into other functions with stronger track records of effectiveness, including the National Contact Point [5].

The record the government invoked was in large part the product of the office's own design. The ombudsperson was never granted the power to compel witness testimony or the production of documents, the basic instruments of investigation into uncooperative parties [4]. The position itself had been vacant for more than a year at the time of closure [4]. The office nonetheless reported the outcomes of five complaints in 2024, its last year under a permanent ombudsperson, and at least 36 complaints were awaiting decisions when the closure was announced, including cases concerning Uyghur forced labour and oil and gas exploration in Namibia [4][5]. Human Rights Watch called the elimination a significant step backwards and recommended that the office be restored with the personnel and investigative powers it had been denied [4].

The sequencing of the week matters as much as the closure itself. On 12 June 2026, the day after the announcement, the government introduced Bill C-35, the Ban on Importing Goods Made with Forced Labour Act, in the House of Commons [10]. Taken together, the two decisions re-platform corporate accountability from a body that asked what companies did to a checkpoint that asks what goods carry.

II. A DISCLOSURE STATUTE PRODUCING REPORTS WITHOUT CONSEQUENCE

The Fighting Against Forced Labour and Child Labour in Supply Chains Act, in force since 1 January 2024, requires government institutions and qualifying entities to file an annual report on their efforts to prevent and reduce the risk of forced labour and child labour in their supply chains [1]. The duty is to report. The Act imposes no obligation to conduct due diligence and contains no prohibition on forced labour in a reporting entity's supply chain. Its penalties, fines of up to CAD 250,000 on summary conviction, attach to the failure to report and to false or misleading statements, not to the presence of forced labour itself [3].

Two reporting cycles have now been completed, and the pattern they record is instructive. The first cycle produced 5,795 reports by the May 2024 deadline [1]. The second produced 4,313, a decline of roughly a quarter [2]. A November 2024 guidance change removed entities that solely sell or distribute goods from the enforcement perimeter [3]. Within the 2025 filings, 82.3% of reporting organisations identified parts of their activities and supply chains that carry forced labour or child labour risks, yet 91% stated that the Act's remediation questions did not apply to them because no instances had been identified, and only 5% reported taking remediation measures [2]. The responsible ministry's own annual report records the enforcement total in a single sentence: in 2025, no orders were made pursuant to section 18 and no charges were laid against any person or entity under section 19 [2].

The juxtaposition is the finding. A reporting population in which more than four fifths acknowledge exposure to forced labour risk while nine tenths find nothing to remediate is describing what a disclosure instrument can see when no duty to investigate stands behind it, rather than the state of global supply chains. Filers are asked what they looked for, not required to look, and nothing in the regime tests what they file. The statute has succeeded at its stated objective of generating transparency, and the transparency it has generated is a record of its own limits.

III. THE BORDER RECORD THE NEW BILL MUST OVERCOME

Canada has prohibited the importation of goods mined, manufactured, or produced wholly or in part by forced labour since 1 July 2020, when the prohibition entered the Customs Tariff through the implementation of the Canada-United States-Mexico Agreement [6]. Enforcement has been complaint-driven, and the public record of it is brief: in the autumn of 2021 the Canada Border Services Agency acknowledged seizing one shipment of women's and children's clothing from China, the first enforcement of the ban [6], and that single detained shipment was later released [7]. The government's own position explains the thinness of the record. Classification decisions are made case by case on available evidence, and the Customs Tariff cannot be used to prohibit goods solely on the basis of their origin in a specific country or region [8]. Trade counsel were still describing enforcement of the prohibition as limited in June 2026 [11].

The contrast with the United States is one of architecture, not effort. Since the Uyghur Forced Labor Prevention Act came into force in June 2022, US Customs and Border Protection has detained 16,755 shipments, valued at nearly USD 3.7 billion, suspected of violating the statute [9]. The American volume is produced by statutory design rather than by case-by-case proof assembled at the border: imports made in whole or in part by listed entities must be refused entry on the presumption that they involve forced labour [9].

Bill C-35 concedes the lesson. The bill would replace the Customs Tariff prohibition with a freestanding statute under which the Minister of Foreign Affairs may establish a list of goods suspected of being produced with forced labour, importers must provide prescribed supply chain tracing information on request, and goods are deemed prohibited where the importer fails to produce it [10]. Customs officers could detain suspected goods for up to 90 days, with importers and owners jointly and severally liable for the costs [10]. The bill adopts the definition of forced labour in the ILO Forced Labour Convention, 1930, and it shifts the evidentiary burden onto the importer, while narrowing the prohibition's scope to forced labour alone, removing the child labour coverage of the current tariff item [10][11]. Public consultations on how listed goods will be identified ran from 27 July to 21 August 2026 [12].

The deeming provision is the operative innovation, because it converts an evidentiary problem the border could not solve into a documentation demand the importer must satisfy. What the bill cannot do is generate the underlying findings. A list of suspect goods presupposes that someone, somewhere, has established which goods are suspect.

IV. THREE FUNCTIONS, AND THE ONE THAT NO LONGER HAS AN OWNER

Supply-chain accountability regimes, in any jurisdiction, perform three distinct functions: disclosure establishes what enterprises say about their chains, investigation establishes what they and their suppliers actually did, and interdiction determines what goods may enter a market. The functions are complements, not substitutes, and the middle one is the hinge, because disclosure acquires meaning only when someone can test it and interdiction operates only on facts established upstream of the border. Canada's one confirmed detention followed external reporting rather than proactive fact-finding [6], and the American detention volume rests on findings legislated into a presumption before any shipment reaches a port [9].

Canada now runs the first function without consequence and is rebuilding the third, while the second has been removed. The ombudsperson's office was the only federal body whose mandate was to establish facts about the overseas conduct of Canadian companies, and its work has been streamlined into other functions, including Canada's National Contact Point [5]. Human Rights Watch's prescription, restoration with the power to compel evidence [4], identifies precisely the capability that no remaining institution holds.

The pattern is not Canadian, and the central defect is portable across domains. A governance system that retains self-reporting and sanction but removes fact-finding produces a recognisable signature wherever it operates: high formal participation, near-zero adverse findings, and growing dependence on facts established by other systems. The S-211 filing statistics display the first two features [2]. The third is already visible in the design of Bill C-35, whose ministerial list will have to draw on findings made by foreign enforcement agencies, researchers, and civil society, because no Canadian institution is now tasked with producing them [10].

V. THE OPERATIVE STANDARD IS SET ELSEWHERE, AND A CANADIAN DUTY REMAINS SCHEDULED

For enterprises connected to Canada, the practical consequence of the rebuild is that the binding standard is set by the strictest market the enterprise touches. The European Union's Forced Labour Regulation, Regulation (EU) 2024/3015, adopted on 27 November 2024, prohibits the placing on the EU market and the export from it of any product made with forced labour, in any sector and from any origin, and applies from 14 December 2027, with non-compliant products subject to withdrawal and disposal at the economic operator's expense [14]. The Corporate Sustainability Due Diligence Directive survived the Omnibus I amendments of February 2026 in narrowed form, applying to companies with more than 5,000 employees and EUR 1.5 billion in turnover, with the EU-wide civil liability regime removed in favour of member-state law and a transposition deadline of 26 July 2028 [15]. The United States presumption regime continues to operate at scale [9]. An analysis of what remains of European human rights due diligence after the Omnibus appears in Solari's examination of the recalibrated directive.

Canada's own due diligence duty, moreover, remains on the legislative agenda. The 2024 Fall Economic Statement committed the government to introduce legislation creating a supply chain due diligence regime, with a new oversight agency to monitor compliance and CAD 25.1 million over two years for implementation [13]. In July 2026, Employment and Social Development Canada opened consultations on due diligence measures that would require Canadian businesses operating abroad to identify, prevent, address, and remediate risks to fundamental labour rights, including questions on civil liability [12]. The consultation calendar points toward a Canadian due diligence bill within the life of the current Parliament, and an enterprise that has calibrated its programme to the S-211 reporting floor will meet that bill from a standing start.

VI. THE LEADERSHIP IMPERATIVE: REBUILD THE INVESTIGATIVE FUNCTION PRIVATELY

The governance consequence of a dismantled public investigator is that fact-finding becomes a private obligation. Boards of enterprises with Canadian operations or Canadian import exposure should draw three conclusions. First, the S-211 report should be treated as the output of a working due diligence system, with supplier mapping, contractual information rights, and grievance channels behind it, rather than as the system itself. The statute does not require the underlying system, but every other instrument the enterprise will meet assumes it exists [3][10][14]. Second, Bill C-35's deeming provision makes the tracing record a precondition of market access, because documentation that cannot be produced within a detention window converts suspicion into prohibition by operation of law [10]. Third, the investigative vacuum raises rather than lowers the premium on internal fact-finding capability. No Canadian institution will now establish the record before a border authority, a foreign regulator, or a plaintiff does, and the enterprise that discovers its own facts first is the one that retains control of remediation.

VII. CONCLUSION: THE REBUILD WILL RUN ON OTHER SYSTEMS' FACTS

Canada has traded an institution that asked what companies did for a checkpoint that asks what goods carry, while leaving in force a disclosure statute that asks only what companies say. Each instrument that remains depends on investigative work the state no longer performs. Three developments will test the architecture. The first presumptive list under Bill C-35 can be expected to track the sectoral concentration of the American entity list, because those are the findings available to borrow. The third S-211 reporting cycle will show whether participation continues to decline in the absence of enforcement. And the Employment and Social Development Canada consultation will reveal whether the promised due diligence regime arrives with an investigative function attached, or whether Canada completes a system in which every obligation is real but no one is tasked with establishing the facts on which all of them depend.

RECOMMENDATIONS

Within 30 days:

Inventory exposure against the instruments actually in force rather than the one most recently filed. Confirm the organisation's S-211 filing status and the quality of what was filed, identify any inputs plausibly connected to the regions and entities driving United States detentions, and determine whether EU market presence brings the enterprise within the Forced Labour Regulation's December 2027 horizon or the recalibrated CSDDD thresholds [2][9][14][15].

Within 90 days:

Build the tracing record that Bill C-35 would make a condition of market access: supplier mapping beyond the first tier for high-risk categories, contractual rights to supply chain information, and a documented escalation path for red flags. Assume the burden of production sits with the importer and that a 90-day detention window is the time available to meet it [10][11]. The compliance architecture that forced-labour border enforcement regimes demand is examined in Solari's analysis of the interdiction model.

Within 6 months:

Stand up an internal investigative protocol proportionate to footprint: who establishes facts when an allegation surfaces, on what timeline, with what access to suppliers, and what findings trigger remediation or exit. Align its shape with the duty signalled by the Employment and Social Development Canada consultation, which contemplates obligations to identify, prevent, address, and remediate [12][13].

Benchmarks that should change the recommendation:

Publication of the first list of suspected goods under Bill C-35 and its implementing regulations; the outcome of the Employment and Social Development Canada due diligence consultation, in particular on civil liability; the enforcement line of the next annual report under the S-211 regime; and any decision restoring a Canadian investigative mandate, whether through a strengthened National Contact Point or a successor office.

CAVEATS

Pending complaint counts at the ombudsperson's closure vary across sources. Human Rights Watch reported at least 36 complaints awaiting decisions, while other contemporaneous reporting cites lower figures reflecting different treatment of files in intake [4][5].

Canada does not publish comprehensive detention statistics under the forced labour import prohibition. The single-interception record reflects publicly confirmed enforcement to late 2023 and counsel-reported practice to mid-2026, and unpublicised detentions cannot be excluded [6][7][11].

Bill C-35 was at first reading at the time of writing. Provisions described here may be amended in committee, and the regulations and first list of suspected goods had not been published [10][12].

S-211 figures are self-reported by filing organisations and are not audited. Cycle-over-cycle comparability is affected by the November 2024 guidance change removing entities that solely sell or distribute goods from the enforcement perimeter [1][2][3].

CSDDD parameters reflect the Omnibus I directive as concluded in February 2026. Member-state transposition may impose obligations above the EU floor, notably on civil liability, which now rests with national law [15].

UFLPA statistics are detentions of suspected violations as reported by US Customs and Border Protection. Detention is not a finding of forced labour, and a portion of detained shipments are subsequently released [9].

REFERENCES

[1] Public Safety Canada, "2024 Annual Report to Parliament on the Fighting Against Forced Labour and Child Labour in Supply Chains Act," Government of Canada, February 2025. https://www.publicsafety.gc.ca/cnt/rsrcs/pblctns/2024-frcd-lbr-spply-chns-prlmnt/index-en.aspx

[2] Public Safety Canada, "2025 Annual Report to Parliament on the Fighting Against Forced Labour and Child Labour in Supply Chains Act," Government of Canada, May 2026. https://www.publicsafety.gc.ca/cnt/rsrcs/pblctns/2025-frcd-lbr-chld-lbr-spply-chns-ct-scnd-rprt/index-en.aspx

[3] Davies Ward Phillips & Vineberg LLP, "Canada Imposes Forced and Child Labour Reporting Obligations," May 2023 (updated November 2024). https://www.dwpv.com/insights/2023/canada-forced-child-labour-reporting-obligations

[4] Human Rights Watch, "Canada Delivers a Blow to Corporate Accountability," 18 June 2026. https://www.hrw.org/news/2026/06/18/canada-delivers-a-blow-to-corporate-accountability

[5] Mongabay, "Accountability advocates 'shocked' as Canadian government eliminates watchdog agency," June 2026. https://news.mongabay.com/2026/06/accountability-advocates-shocked-as-canadian-government-eliminates-watchdog-agency/

[6] McMillan LLP, "Combatting Forced Labour in Supply Chains from a Canadian Customs Perspective," December 2021. https://mcmillan.ca/insights/combatting-forced-labour-in-supply-chains-from-a-canadian-customs-perspective/

[7] Baker McKenzie, "Canada: Enforcement update on Canada's Import Prohibition on forced and child labor," Global Compliance News, December 2023. https://www.globalcompliancenews.com/2023/12/20/https-insightplus-bakermckenzie-com-bm-international-commercial-trade-canada-enforcement-update-on-canadas-import-prohibition-on-forced-and-child-labor_11282023/

[8] Public Safety Canada, "Question Period Note: Import Prohibition on Goods Produced by Forced Labour," Government of Canada, May 2024. https://search.open.canada.ca/qpnotes/record/ps-sp,PS-2024-QP-1--MPS-010

[9] Laura T. Murphy and Charlotte Tate, "Assessing the Impact of the Uyghur Forced Labor Prevention Act After Three Years," Center for Strategic and International Studies, August 2025. https://www.csis.org/analysis/assessing-impact-uyghur-forced-labor-prevention-act-after-three-years

[10] Fasken Martineau DuMoulin LLP, "Canada Introduces New Bill to Strengthen Importation Ban," June 2026. https://www.fasken.com/en/knowledge/2026/06/canada-introduces-new-bill-to-strengthen-importation-ban

[11] McCarthy Tétrault LLP, "Modern Slavery Alert: Canada Proposes Revamp To How It Addresses Forced Labour In Supply Chains," June 2026. https://www.mccarthy.ca/en/insights/blogs/terms-trade/modern-slavery-alert-canada-proposes-revamp-to-how-it-addresses-forced-labour-in-supply-chains

[12] Global Affairs Canada, "Canada launches public consultations on measures to strengthen Canada's fight against forced labour in global supply chains," Government of Canada, July 2026. https://www.canada.ca/en/global-affairs/news/2026/07/canada-launches-public-consultations-on-measures-to-strengthen-canadas-fight-against-forced-labour-in-global-supply-chains.html

[13] Global Affairs Canada, "Statement by Minister Ng on forced labour measures in 2024 Fall Economic Statement," Government of Canada, December 2024. https://www.canada.ca/en/global-affairs/news/2024/12/statement-by-minister-ng-on-forced-labour-measures-in-2024-fall-economic-statement.html

[14] Akin Gump Strauss Hauer & Feld LLP, "EU Forced Labour Regulation Is Now Adopted: What Does It Mean?", December 2024. https://www.akingump.com/en/insights/alerts/eu-forced-labour-regulation-is-now-adopted-what-does-it-mean

[15] Clifford Chance, "Omnibus I: the European Union concludes CSDDD and CSRD reforms," Business and Human Rights Insights, February 2026. https://www.cliffordchance.com/insights/resources/blogs/business-and-human-rights-insights/2026/02/omnibus-i-the-european-union-concludes-csddd-and-csrd-reforms.html