The Canadian Ombudsperson for Responsible Enterprise dismissed a complaint against a major Canadian retailer over alleged failures to pay a living wage in its Bangladeshi supplier factories. The Ombudsperson had originally accepted the case but then closed it 202 days after its initial decision. It cited as reasons the current lack of international consensus on living wages, the forthcoming ILO standardised methodology on living wages, and that Canada does not require or have guidance on living wages.
- On 23 December 2024, The Canadian Ombudsperson for Responsible Enterprise (CORE) decided to drop its investigation into a complaint against Canadian Tire Corporation and its subsidiary, Mark’s Work Wearhouse (now Mark’s). The complaint alleged that the companies sourced from Bangladeshi factories that do not pay workers a living wage. CORE cited a lack of international consensus on living wages and ongoing work by the ILO to establish standards as reasons for not proceeding with the case.
- The complaint was initially filed by the United Steelworkers (USW), a major North American labour union, and the Canadian Labour Congress, Canada’s largest labour federation, of which the USW is a member.
- Canadian Tire is a large Canadian retailer with revenue over CA$16 billion, specialising in a range of products including automotive, apparel, home goods and sporting goods. Its subsidiary, Mark’s, is a footwear and apparel retailer.
About the complaint
- The complaint, filed on 21 November 2022, alleged that Mark’s sources from factories in Bangladesh that fail to pay a living wage. A summary of the complaint names two factories – Patriot Eco Apparel Ltd. and Standard Stitches Ltd. – but references that the complaint was broader than these two factories. The complaint also alleged that Mark’s and Canadian Tire do not publicly disclose information on their suppliers, or how much workers are paid by those suppliers.
- The complainants linked Mark’s to its suppliers using international shipping records obtained through the shipping database Panjiva. They referenced a January 2021 report by the Steelworkers Humanity Fund, which included interviews with 35 workers from factories supplying to Canadian brands. The complaint also references wage data from the Garment Worker Diaries (GWD), which found that wages in five of Mark’s factories were 45-55% below living wage benchmarks, despite being 10% higher than industry-wide wages. GWD collects data directly from garment workers through anonymous surveys to track wages and working conditions.
- The complaint referenced three living wage benchmarks: Centre for Policy Dialogue, Asia Floor Wage Alliance, and GWD.
Decision by the Ombudsperson
- CORE published an Initial Assessment Report in March 2024 in which the Ombudsperson indicated that it would proceed with an investigation. However, in its final report, CORE said it would not pursue further investigation, citing the following reasons:
- The ILO is already engaged in ongoing work to define the concept of a living wage, and this could make any assessment or findings by the CORE duplicative. (See below for further details.)
- The Government of Canada does not currently mandate a living wage domestically or provide guidance to companies on implementing living wages abroad.
- The CORE is not authorised to create new standards in responsible business conduct, and without an internationally recognised standard for living wages, it would be inappropriate to assess the company’s actions.
- Mark’s has taken concrete measures to enhance supply chain transparency, including publishing a list of its supplier factories, conducting audits of supplier factories in Bangladesh, and complying with Canada’s new forced labour reporting requirements under Bill S-211. The Ombudsperson determined that, considering these steps, no further follow-up was required on transparency.
- The United Steelworkers and the Canadian Labour Congress strongly criticised the final report, noting that it was published 202 days after the CORE had stated that it would proceed with an investigation.
Implications and context
- On 13 March 2024, the ILO Governing Body agreed on principles to calculate a living wage. As a next step, the ILO will update its existing methodology for calculating the needs of workers and their families to align with these principles. The revised methodology is expected in the first semester of 2025. It will become the standardized international methodology for calculating a living wage once published.
- Living wages are covered by the Corporate Sustainability Due Diligence Directive (CSDDD) and so the findings from this case do not necessarily provide any implications on how EU governments will address living wage cases once the law starts applying to companies.
About CORE
- CORE is a business and human rights ombudsman established by the Government of Canada. Complaints can be filed against Canadian companies working outside Canada in the garment, mining, or oil and gas sectors for possible human rights abuses in their supply chains or operations.