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A new complaint filed with a federal watchdog alleges that workers at Bangladeshi factories supplying Canadian Tire receive “poverty-level wages”.

The Canadian Labour Congress and one of North America’s largest private-sector unions, United Steelworkers, filed the complaint with the Canadian Ombudsperson for Responsible Enterprise on Monday. CORE was set up in 2019 by Prime Minister Justin Trudeau to investigate accusations of human-rights abuses related to Canadian businesses’ activity overseas.

CLC and USW are requesting that CORE investigate Canadian Tire and its subsidiary, Mark’s, “to determine the extent of their human-rights abuses in the Bangladesh ready-made garment industry, specifically, their failure to ensure workers in their supply chain are paid a living wage.”

According to the complaint, factories in Bangladesh produce clothing that Mark’s (formerly known as Mark’s Work Wearhouse) sells in stores in Canada, under brands the company owns including Denver Hayes, Helly Hansen and WindRiver. The complaint says wages paid to workers at these factories fall significantly below “living-wage benchmarks” for the country, which it says is a human-rights abuse that is under CORE’s mandate to investigate.

“Canadian Tire Corporation (CTC) works to ensure that its suppliers comply with all local laws; this includes compensation,” company spokesperson Stephanie Nadalin wrote in a statement on Tuesday. “As part of our activities to ensure compliance, CTC regularly tracks wage rates and works with reputable third parties to audit factories that manufacture our owned brand products.”

The company is not the only Canadian retailer that sources products from Bangladesh. The complaint focuses on the company partly because of its market power, said Doug Olthius, department leader for global affairs at USW’s Canadian national office.

“Somebody needs to take leadership on this issue. We believe Canadian Tire has the resources and the leadership to do it,” he said, adding that USW may consider filing complaints for other companies in future.

The garment industry accounts for more than 80 per cent of Bangladesh’s exports, providing apparel to major retailers including Walmart, Gap Inc., and Canadian names such as Lululemon Athletica Inc. and Loblaw Cos. Ltd.-owned Joe Fresh.

Many safety improvements have been made in Bangladesh since the the Rana Plaza garment factory collapse in 2013, which killed 1,138 people, said Kalpona Akter, the executive director of the Bangladesh Center for Workers Solidarity. “But they are still below the poverty line,” she said, adding that companies’ audits of their supplier factories are often ineffective because workers may not give an honest account of the conditions. “If you speak up, you are not protected.”

The complaint argues that inflation has made the issue of a living wage more urgent, as the costs of necessities such as food have risen significantly in Bangladesh. To determine its living-wage benchmark, the complaint relies on reports from three groups: the Centre for Policy Dialogue, the Asia Floor Wage Alliance, and Garment Worker Diaries, which calculated a range of earnings workers would need in order to meet the basic costs of living. Minimum wages for garment workers in Bangladesh amount to the equivalent of roughly $109 to $249 a month, based on a 60-hour week, according to the complaint, falling well below the benchmarks reported by two of the three groups. Only the high end of the range falls within a benchmark determined by Garment Worker Diaries, and then only if the worker is not the sole earner in their household. It also cites a 2021 report from the Business and Human Rights Resource Centre, which found garment workers’ monthly minimum wage in Bangladesh is only one-sixth of a living wage. The complaint notes that many brands rely on local minimum-wage laws when responding to questions about their supply chains.

Canadian Tire has a code of conduct that requires suppliers to “at a minimum, provide wages and benefits that comply with the laws of their country of operation.” However, in declining to stipulate that factories pay a living wage, the complaint argues that Canadian Tire has lower standards than other Canadian companies. Those include Aritzia, which has a code saying that wages must “be enough to meet basic needs and to provide some discretionary income,” and Lululemon, which has similar requirements. The complaint also argues that Canadian Tire should be more transparent about its supply chain, including listing the factories it works with, as Loblaw and Hudson’s Bay Co. both do.

The complaint cites data from Panjiva Inc., which tracks global commercial shipments, identifying shipments from roughly 30 suppliers in Bangladesh associated with Mark’s between January, 2019, and July, 2021. It also cites data from Garment Worker Diaries, which collects information on factory pay – and had obtained wage data for five of the factories in the Panjiva records, showing they fell short of a living-wage benchmark. The complaint asks CORE to further investigate Mark’s and Canadian Tire’s practices to determine whether sufficient wages are paid by its other suppliers.

While retailers do not operate their own factories overseas, and in many cases work with factories that supply multiple clothing brands, the complaint notes that retailers “have the power to set prices,” which affects the wages the factories pay. The complaint asks CORE to recommend that Canadian Tire commits to ensuring a living wage is paid to garment workers across its global supply chain, and that the company negotiate with trade unions in Bangladesh to compensate workers who were not paid a living wage.

Mark’s, which has 380 stores in Canada, is a relatively small part of Canadian Tire’s business, accounting for less than 10 per cent of its overall retail revenue so far this year. But the chain’s sales have been growing, as demand for casual and industrial clothing has been strong. As of the third quarter, Mark’s comparable sales have grown 13.4 per cent year-to-date, the company recently reported.

Follow Susan Krashinsky Robertson on Twitter: @susinskyOpens in a new window

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