Canada is moving to strengthen its forced labor import regulations as the United States winds up its Section 301 investigations and weighs imposing additional tariffs of 10 percent on its U.S.-bound exports for failing to enforce laws against goods made with forced labor.

On Friday, Canada’s House of Commons held the first reading of Bill C-35, an act prohibiting the importation of goods produced by forced labor. If adopted, Ottawa said the legislation would expand on and replace the country’s current forced labor import ban under a customs tariff adopted in 2020 as part of the U.S.-Mexico-Canada Agreement.

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While the original ban relies on a risk-based approach to identify shipments of goods that may have been produced by forced labor, the proposed act would authorize Canada’s minister of foreign affairs to compile a list of high-risk goods, flagged by region, entity or individual, where there is reasonable suspicion about the involvement of forced labor.

It would also establish requirements for importers of certain high-risk goods to provide enhanced supply chain tracing information to customs authorities and introduce a provision barring the import of high-risk goods when mandatory information requirements are not met.

“The proposed legislation would provide predictability and clarity by identifying goods that may present a higher risk or where there are reasonable grounds to suspect the use of forced labor,” the Canadian government said in a statement. “It would help businesses ensure that goods entering Canada comply with the law and supports Canadian importers in strengthening their understanding of supply chains and their ability to assess potential exposure to forced labor risks. The enhanced framework would promote due diligence practices.”

Ottawa says the legislation would level the playing field for Canadian businesses by shielding them from unfair competition from companies that exploit workers, while also boosting Canadians’ confidence that products on their shelves come from transparent, accountable supply chains free from egregious abuse.

The Fighting Against Forced Labor and Child Labor in Supply Chains Act, which came into force in 2024 to require certain entities and federal institutions to report annually on steps they’ve taken to prevent or reduce the risk of forced and child labor in their supply chains, will also continue to serve as a complementary measure that promotes transparency and accountability, it added.

At a press conference on Parliament Hill, Rob Oliphant, Parliamentary Secretary to Foreign Affairs Minister Anita Anand, called the act a “made-in-Canada solution to an international problem” that should address Trump administration concerns, though he said American pressure was only part of the reason the bill was being tabled and that the Liberals had promised improvements in late 2024, just before then-prime minister Justin Trudeau’s resignation.

“We do not want dumping of cheaper materials, cheaper goods into Canada that are produced with forced labor,” Oliphant said. “It’s unfair to small, medium and large businesses in Canada who have to compete.”

But Laura Murphy, a Sheffield Hallam University human rights expert who advised the U.S. Department of Homeland Security on forced labor policy during the Biden administration, said the bill has several flaws, including no requirement that Canadian customs act on the list, rendering it “entirely informational.”

She also noted the list won’t specify geographies such as China’s Xinjiang Uyghur Autonomous Region or North Korea that involve state-imposed forced labor. Nor does it include an allegations mechanism for reporting forced labor goods entering Canada and remediation measures needed to conclude enforcement action.

“While this law will provide some more information to importers, it duplicates efforts of the U.S. Department of Labor and (soon) the EU forced labor database,” she wrote on LinkedIn. “This proposed law will not really improve the enforceability or effectiveness of Canada’s import prohibition.”

Bill C-35 also comes amid mounting criticism that Canada isn’t fulfilling its forced labor obligations, whether under the USMCA or otherwise. Canadian Prime Minister Mark Carney acknowledged this at a press conference in Toronto last week, saying that while Canada has a “strong legal framework and standards and responsibilities,” it has been “less effective” in fully enforcing them.

“Some of that relates to how the responsibilities are structured legally, some of it relates to resources,” he added.

At the same time, Carney’s government has left the office of the Canadian Ombudsperson for Responsible Enterprise, which investigated human rights violations by Canadian companies abroad, vacant despite saying the position “remains important.” The delay, which has left existing complaints unable to move forward, drew the Canadian Network on Corporate Accountability’s condemnation in May, a year after the interim agency’s one-year mandate expired.

“Complainants, representing communities and workers who have suffered significant harm—and who were encouraged by Canadian officials to trust the CORE, often at substantial risk of retaliation—have been left without answers, despite repeated requests for even basic information about the office’s status,” the coalition of nearly 30 civil society organizations said. “At least 36 complaints are currently awaiting decisions from the CORE, but the office cannot advance complaints until the government appoints a new ombudsperson.”

In the U.S. Trade Representative’s report on the Section 301 probes, the office found that while Canada has imposed a forced labor prohibition, it isn’t effectively enforcing it.

“The number of enforcement actions Canada has taken to prevent the entry of forced labor goods is minimal,” the report said. “The Canada Border Services Agency, the agency responsible for enforcing Canada’s forced labor import prohibition, does not appear to publish official statistics or other information regarding its enforcement efforts.”

According to what little information is available, the USTR added, Canadian authorities intercepted only 50 shipments on suspicion of forced labor between 2020 and 2026, with just two shipments ultimately prohibited from entry. In contrast, in 2024, U.S. Customs and Border Protection denied entry to nearly 6,390 shipments under the Uyghur Forced Labor Prevention Act alone.

Canada has also not taken action to prevent the entry of goods known to involve forced labor, including taking “only minimal action” to investigate imports that are subject to CBP’s Withhold Release Orders or Findings, or to “comprehensively address” forced labor goods produced in regions of concern.

“Moreover, independent reporting highlights that there is a high risk that Canadian companies are profiting from the importation of forced labor goods, such as seafood, coffee, cocoa, and cotton,” the report said before citing the Coalition of Forced Labor in Trade’s description of the country as a “dumping ground” for re-exports of forced labor products banned from the United States.

“Canada also lacks some of the eight elements that independent research identified that inform whether a forced labor import prohibition will be effective, such as a public entity list and rebuttable presumption,” it added. “Given these known risks, Canada’s overall low level of enforcement indicates Canada is deficient in compelling observance of its forced labor import prohibition in a manner to produce the desired effect.”

The status quo will remain for now. The Trump administration must conduct further public consultations before any tariff can go into effect. The bill, too, will require its own process of study and consultation.

Still, Ottawa says Bill C-35 will support Canada’s broader efforts to eradicate forced labor.

“Canada works closely with international allies and partners to advance this objective, including through cooperation in multilateral forums and as a signatory to key International Labour Organization instruments on forced labor,” the government said. “Canada also promotes strong labor provisions in its trade agreements. Additionally, Canada’s Trade Commissioner Service promotes responsible business conduct to Canadian companies operating abroad, helping them identify, prevent and address forced labor risks.”