Big firms embroiled in alleged trafficking schemes

Complex chains link temporary workers to major employers

Even in the Holland Marsh, a verdant stretch of land known as Canada’s “salad bowl,” Gwillimdale Farms stands out.

It’s a sprawling 2,000-acre operation, able to pack 350,000 pounds of potatoes, carrots and other root vegetables in a single day. The farm has served as the backdrop for political announcements by Premier Doug Ford, and last spring benefited from a provincial grant to create “safer workplaces” and “address labour shortages.”

Around the same time, the farm was sourcing workers through middlemen now accused of labour trafficking, according to search warrant materials and court documents obtained by the Star.

Gwillimdale is one of two dozen employers allegedly entangled with agencies, recruiters, and labour brokers now criminally charged under anti-trafficking laws, a Star analysis has found. These workplaces include some of the province’s most recognizable employers, from major hotel chains to one of the country’s largest manufacturers.

In a statement, a lawyer for Gwillimdale said the farm is “committed to ongoing compliance” with workplace laws. “Gwillimdale Farms has prided itself on creating a strong, positive workplace culture, which includes a focus on the health, safety, and well-being of all of its workers,” the statement reads.

Auto-parts manufacturer Magna International says it ended its dealings with a temp agency after discovering it was supplying “temporary workers to its facilities who had been victimized by a human labour trafficking scheme.”

Star analysis reviewed thousands of pages of court records

To analyze the breadth of demand for what experts call “exploitable labour,” the Star reviewed thousands of pages of court documents, tribunal records and search warrant material related to 10 human trafficking prosecutions.

Critics are concerned that criminal prosecutions, which usually target low-level middlemen, are unlikely to weaken this demand.

They say the current system does not incentivize companies to clean up the convoluted — and often exploitative — recruitment chains feeding their workplaces.

Advocates believe the Labour Ministry should take the lead on rigorous enforcement that not only roots out unscrupulous agencies, but also deters companies from turning to them in the first place. Where necessary, that means holding to account the manufacturers and hotel chains that rely on temp workers for the agencies’ violations — including workers’ unpaid wages.

The province recently paused the implementation of a licensing regime for temp agencies and recruiters, which it had touted as a means to stop “criminals” who “prey on vulnerable workers.”

“Our policy-making continues to treat these issues as if they are isolated examples of bad actors,” said labour and human rights lawyer Fay Faraday, who is also an associate professor at York University’s Osgoode Hall Law School.

“(This) is a core practice in our economy. This is not some shady thing happening on the side. This is big business.”

Inside ‘the Ranch’

Last November, police received a tip from a man claiming dozens of people were living in abysmal conditions at a remote East Gwillimbury property. “The Ranch,” as it was called, was plagued by ticks and other pests, police were told; some residents were forced to sleep in a stairwell. They were allegedly being sent to work at farms and factories seven days a week by someone known as “El Chino.” One worker had recently tried to kill themselves with scissors.

Details of the tip and ensuing investigation are contained in the material investigators used to secure search warrants, known as an information to obtain (ITO), copies of which were obtained by the Star.

In March, York Regional Police announced the results of “Project Norte,” which they said had uncovered an alleged criminal network staffing Ontario companies with low-wage workers, typically recruited from Mexico. Raids at several properties, including the Ranch, had led to the arrest of five individuals on criminal labour trafficking charges.

None of the allegations made in warrant materials have been proven in court, where the case is still in its preliminary stages.

By the time police showed up at the doorstep of the Norte properties, some of the workers, such as Alejandro Rivera, had already fled.

Rivera had escaped violence in Mexico for what he thought was an $18-an-hour job in Canada. When he arrived, he says he found himself living with 43 other people in a house with three bathrooms, one kitchen and a cockroach infestation.

The Star is not using Rivera’s real name due to possible reprisal. Rivera is not a witness in Project Norte prosecution. In an interview, both Rivera and a co-worker said they were charged $500 a month to live in decrepit accommodations and whisked to a variety of $13-anhour jobs across the province.

They mostly packed vegetables like onions and carrots at Gwillimdale Farms and other agricultural outfits, often working 10 to 13 hours a day. Rivera told the Star he was also once forced by his recruiters to drive two hours away to a facility owned by Magna.

Magna ended contract over ‘distressing’ treatment of workers

He was one of around 30 workers who ended up at the auto giant, according to search warrant materials. Magna is one of the world’s largest automotive suppliers, and in February the company announced a $470million investment to expand its operations across Ontario. This mission was supported by some $23.6 million in grants from the provincial government to “bring additional highquality jobs to the region.”

The manufacturer became embroiled in the Project Norte case through a chain of agencies and subcontractors, Magna spokesperson Tracy Fuerst told the Star. While the company had “no dealings” with the individuals or agencies named in the prosecution, it did for a period pay Tianjin Auto Parts to “occasionally” provide factory workers to several of its plants.

Magna began investigating its staffing partners after an early February visit from the Ministry of Labour. No violations were identified, but officials warned Magna that unscrupulous agencies were operating in the area, according to Fuerst.

The manufacturer discovered that Tianjin had subcontracted its staffing responsibilities to a numbered company. That company, in turn, did business with an unnamed “human trafficker” recruiting vulnerable workers to come to Canada, Magna alleges in a lawsuit against Tianjin.

“Needless to say, the findings of our investigation and the concerns they triggered were distressing, as (Tianjin’s) treatment of temporary workers was completely at odds with Magna’s values,” said Fuerst.

The company immediately ended its relationship with Tianjin, proactively offered employment and immigration support to impacted workers, and strengthened its oversight over contracts, Fuerst said.

Through its lawyer, Tianjin said it “vehemently denies that it was involved in any criminal enterprise” and called Magna’s allegations “ridiculous.” Tianjin said it was never investigated, charged, or even contacted by police in connection to Project Norte.

Tianjin is currently suing Magna for $1.3 million in unpaid invoices and several million in damages for ending their “long-standing” business relationship. Magna launched a counterclaim alleging “breaches of contract and other unlawful conduct.”

The Ministry of Labour, which recently established an internal unit to help identify potential trafficking schemes, said it could not comment on active investigations. As the legal fallout from Project Norte unfolds, it is unclear whether impacted workers have recovered any of their unpaid wages.

An alleged drug dealer’s side hustle: labour trafficking

In the summer of 2022, police intercepted the communications of an alleged cocaine trafficker in which he brags about his flourishing side hustle: selling workers’ labour.

The man’s conversations reveal how lucrative the worker industry can be for middlemen. He charged 10 to 12 workers $400 a month each to live at his rural Niagara property, which police described in search warrant material as “derelict” and “uninhabitable.”

The workers, who had arrived in Canada on tourist visas, sometimes worked up to 71 hours a week cleaning Hilton and Ramada hotels in the region, the warrant materials say. In his intercepted phone calls, the alleged drug trafficker says the scheme is more profitable than his construction business, and describes the hotels as being “so happy” with the arrangement.

Ramada’s franchisor, Wyndham Hotels, said it could not comment on behalf of its Niagara locations, which are all independently operated. However, the company said it was “troubled” by the allegations and is “actively investigating with the owners of the hotels in question.” Hilton Hotels also said its Niagara locations were independently operated.

Temp agency tried to dodge accountability

When employers turn to temporary help agencies, these intermediaries act as workers’ legal employer. This can obscure wrongdoing and complicate government efforts to hold anyone accountable.

In 2019, Labour Ministry inspectors began investigating a temp agency called Temporary Personnel Solutions (TPS) that had been supplying workers to farms and a major manufacturer in the Tillsonburg area.

What the clients did not know, they later told labour officials, was that TPS had entered into its own arrangement with various “subcontractors” in order to procure labour. These subcontractors operated out of a Hamilton “flop house” and supplied TPS with hundreds of workers to send across the province, according to witness testimonies and inspectors’ statements in labour board tribunal records obtained by the Star.

The subcontractors’ operations were set up under the name of a third party — a 52year-old manual labourer who, in a moment of financial distress, was persuaded into “signing some paperwork” in exchange for $10,000, according to testimony heard by the tribunal.

That was the last of the man’s dealings with the business, the ministry determined. But when inspectors found TPS owed workers $1.5 million in unpaid wages, the company pointed the finger at the Hamilton labourer — setting off a protracted legal battle over who should pay back the stolen money. By the time the labour board ruled TPS was responsible, the agency had shut down.

TPS’s lawyers and directors did not respond to the Star’s request for comment. In an interview with the Star, a former TPS manager disputed many of the ministry’s claims and the labour board’s findings, including the amount of unpaid wages.

Ontario law does not require agencies to disclose how big a cut they take from workers’ pay, or who their subcontractors are. Nor is there a strong incentive for many employers to do robust due diligence on staffing partners, said Syed Hussan, the executive director of the Migrant Workers Alliance for Change.

The Labour Ministry has the power to hold both agencies and their clients jointly liable in wage theft cases. But the province rarely uses it. While it has ordered agencies to pay workers unpaid wages 105 times since 2020, it has issued joint orders that also apply to these agencies’ clients on three occasions.

“That’s ridiculously low,” said Hussan.

The Labour Ministry says it has taken numerous steps to crack down on bad actors — and “won’t hesitate” to take more if needed, according to a spokesperson.

The government had planned a new regime requiring that temp agencies and recruiters have a licence to operate — a registry that it said would be the “most comprehensive of its kind in Canada and will help protect the most at-risk members of our society.”

Earlier in November, just six weeks before it was scheduled to take full effect, the labour minister told workers’ rights advocates the province was delaying implementation until July 2024. Only around 570 of 3,400 active agencies had so far applied for or received the licence.

The minister said the delay was necessary because of “the complexity of the potential impact on the recruitment and short-term employment sector, which are crucial to our economy,” according to a letter obtained by the Star.

In the meantime, the ministry will continue inspections and enforcement related to the temp sector to make sure companies are following the law, the minister’s letter said.

There remain strong financial incentives for employers to use agencies. Temp workers can legally be paid less for doing the same work as permanent employees, and agencies assume financial responsibility for workplace accidents.

As trafficking prosecutions spike, human rights lawyer Faraday remains concerned about how effective they are at tackling exploitation. These criminal proceedings are about “the offence that’s been committed against the state, not about delivering safety, remedies and compensation to workers,” she said.

“That’s where the real work needs to happen.”