As Canada lowers its tariffs and imports more electric vehicles from China, a forthcoming report from New York-based labor rights researchers makes new allegations of forced labor practices at the world’s top-selling EV maker, BYD.
China Labor Watch (CLW) received a complaint that ended up killing one of the thousands of migrant workers brought to Hungary from China to help build BYD’s first European factory in the city of Szeged – a $4.5 billion investment aimed at supplying the European market with around 300,000 cars a year.
The nonprofit launched the investigation and provided CBC News with an advance copy of its findings, which are scheduled to be published later this month.
“It’s important for consumers to know what really goes into creating some of these electric vehicles, and the labor conditions that go into producing these vehicles,” said program director Elaine Lu.
“The Chinese workers who are brought in to work in these areas are employed under very poor conditions.”
CLW interviewed 50 employees. In order to protect their safety and reduce the risk of retaliation, no names appear in the report. Many of the CLW field staff interviewees were construction and installation workers recruited by subcontractors or other consultants.
The report details possible violations of Hungarian labor and transport laws, including:
- Working seven days without days off, workers told CLW they were told to lie to inspectors about their working hours if asked.
- Shifts are up to 12 or 14 hours, with a short meal break and no paid overtime.
- The payment of wages has been delayed for up to three months, with the final payments held until the workers return to China.
- High rents are used as debt obligations, with low-wage workers saying they are forced to stay despite poor conditions because they can’t afford to default on their contracts.
- Workers enter on business visas instead of authorized work permits, leaving them vulnerable to harassment and unable to access services such as health care due to work-related injuries.
CBC News has not independently verified any of the allegations.
BYD did not respond to a request for comment.
Dull hiring, shifting accountability
CLW also outlined how the tangled webs of responsible contracting blur the lines of legal responsibility for poor working conditions, potentially allowing BYD to escape liability.
“If there are problems, they just say, ‘this was a subcontractor problem, they hired them.’ So they run away from their responsibility,” said Lu.
He said the workers are at risk because they do not know the local language or local laws. “They don’t know who they will go to if they want their wages back.”
Lu said local Hungarian media have started reporting on security in the area following the death of a Chinese worker in February. CLW met with local authorities to share their findings last month.
“We hope that BYD will take this violation and these findings seriously because … it is a violation of local laws and international standards,” Lu said.
Foreign affairs critic Michael Chong said a report like this makes it more urgent for Prime Minister Mark Carney to clarify what he thinks about whether he believes there is forced labor in China’s chains.
“If we allow these products into Canada, we create a market, and that allows these states to suppress human rights and control the population,” Chong said. “That’s why these clauses are written into Canada’s trade agreements – to prevent this from happening.”
This finding is not the first time that BYD’s labor practices have been questioned. Last May, prosecutors in Brazil sued BYD and two of its contractors what they say”conditions like slavery” in its factory in the state of Bahia.
CLWs also conducted a separate investigation into labor conditions at BYD factories in China itself.
“No one is wondering why cars were so cheap: it’s because if you decide to choose to be able to pay for your limited services at the expense of social standards of impartiality, someone pays the bill,” said the president of the Automotive Parts Manufacturers Association Flavio Volpe.
“For Chinese advanced goods, they don’t just export products. They export their domestic business processes and hide behind good investment numbers in the hope that we will look away.”
The report is “very concerning,” said Canadian Vehicle Manufacturers Association president Brian Kingston.
“The Canadian auto industry can compete and win but the playing field must be level,” he said.
BYD imports: ‘forced labor risk’
After the Canada’s deal earlier this year to lower prices on Chinese electric carsthere are growing signs that BYD, which overtook Tesla last winter to become the world’s best-selling EV maker, preparing to open dealerships in Canada and gain focus on the North American market.
Canada is a signatory to the International Labor Organization’s forced labor convention and has passed domestic legislation that prohibits the importation of any manufactured goods made with forced labor.
CLW’s allegations are consistent with the ILO’s indicators of forced labor.
“I think it would be very dangerous if you take BYD cars from China and import them to Canada,” said Lu.
On March 27 social media postsChina’s embassy in Ottawa said allegations of forced labor in its auto supply chains are “blatant lies spread by a handful of anti-China people.”
“What they want is to deprive the Chinese people of their right to pursue a happy life through hard work, disrupt the production and normal operation of Chinese enterprises and suppress China’s development, which will also seriously damage the stability of global supply chains,” the document said.
The US continues to impose 100 percent tariffs on all electric vehicle imports from China.
2026 United States Trade Representative Report on Foreign Trade Barriers he said “it does not appear that Canada is enforcing the law that prohibits the importation of workers.” USTR’s 2025 report did not name Canada on this issue.
As part of the Trump administration’s plan to reverse tariffs struck down by the US Supreme Court, Canada has been placed under investigation by countries accused of allowing imported goods into its market. A hearing in the investigation will be held later this month.
Canadian exports can face tariffs of up to 25 percent if found in violation. The Canada Border Services Agency did not respond to a CBC News inquiry about whether it had been contacted for the USTR investigation.
In 2024, a US Senate investigation found that auto parts made by force they were imported into the North American market for use by global companies including BMW, Jaguar, Land Rover and Volkswagen.
The CBSA has impounded the suspected car parts
Questions from CBC News about whether any EVs have entered Canada from China since the tariffs have been lowered have not been answered by the border agency or the offices of several ministers.
The CBSA, however, shared an explanation of how Canadian law differs from US law: Canadian authorities cannot prohibit imports based on origin. Enforced labor violations are determined on a case-by-case basis, posting by posting.
If officials have doubts, they can impound suspect goods for 30 days and ask for additional documents. Exporters have a responsibility to exercise due diligence in their supply chains.
The CBSA revealed to CBC News that in 2023, an unspecified number of auto parts shipments from China were seized and detained due to forced labor issues. Faced with scrutiny, the importer chose to re-export the car parts back to his home country.
The Canada Customs Act does not allow the CBSA to share company names or identifying information, and it will not confirm, deny or reveal the status of its investigation. But this example suggests that border officials are aware of the dangers of forced labor in China’s auto supply chain and, at least this time, are keeping the dirty goods out.
Finance Minister François-Philippe Champagne told CBC News that he discussed supply chain integrity issues when he met with top Chinese officials in Beijing last week.
“I suspect that they may have seen the media in Canada before my visit. And they know that this is part of Canadian policy, to make it very clear where we stand on these issues,” he said, while refusing to reveal more about his private meetings.
The deputy minister at Global Affairs Canada also met with the Chinese ambassador in Ottawa last week. On social media, the ambassador said that they had “good and deep discussions” about implementing the agreement their two leaders made earlier this year.
