Understanding Debt Bondage

Canadians are no strangers to debt. According to a 2019 Statistics Canada survey, nearly 75% of Canadian’s have some type of outstanding debt, or used a payday loan in the last twelve months. Over 30% of Canadian’s believe they have too much debt.

Many of us already have or inevitably will experience some type of debt, whether it be a car or home loan, credit card, or even borrowing cash from a friend.  

Now imagine if you found yourself with an ever-increasing debt that you could never pay off? This is the reality for individuals trapped in debt bondage.

What is debt bondage?

Debt bondage (also called debt slavery or bonded labour) is when someone is forced to pay off a loan by working for little or no payment. Debt bondage is one of the most common methods of exploiting victims of human trafficking.  

Traffickers may tell victims that they have incurred debt due to expenses associated with transportation, housing, food, and documents such as work permits and visas. Often, traffickers will pile more on top of the initial debt, citing costs such as interest on the initial debt, ongoing costs of food and housing, and additional necessities like medication.

Additionally, traffickers will often add fines if daily work goals or hours are not met, further increasing the amount owed.

In many cases, victims of debt bondage work far more and for far longer than is required to pay off their loan. As the amount of debt is continually increased, victims are set up so that their debt is impossible to repay.

Bonded labourers are often subject to other forms of exploitation and mistreatment as well, such as physical and psychological abuse, dangerous working conditions, and extremely long work hours.

There are numerous industries that are likely to incorporate the practice of debt bondage. Bonded labourers are involved in producing a wide range of goods including but not limited to rice, bricks, tea, coffee, diamonds, and clothing.

Debt bondage in history

Debt bondage has a long history, with instances of its practices dating back centuries. Individuals would borrow resources or money from the wealthy, only to discover the predatory nature of their loans. This trapped individuals in a cycle of indebtedness that was seemingly impossible to end. The lender would then demand labour or services from the borrower as an alternative form of repayment.

While debt bondage has historical roots, it persists today in a very similar form in our modern society.  

Who is impacted by debt bondage?

Debt bondage is a common tactic used by traffickers to exert power and control. Anyone can become a victim of forced labour and debt bondage. However, those at the greatest risk often come from vulnerable and marginalized communities.  

Migrant workers are a particularly at-risk group. Traffickers may exploit workers looking for a better life in a different country, offering enticing job opportunities to migrants. Once the worker has arrived at their new job, the trafficker states that costs like work permits, travel and immigration costs, housing, and food all must be repaid. The trafficker may take the worker’s passport and other legal documents away until the debt is repaid. Language barriers may make it difficult for the migrant worker to understand the terms of their working agreement, or what their rights as a worker are.

Those living in poverty may take a loan or advance from an employer due to a lack of economic alternatives, in exchange for their labour or the labour of their family. Debts may even be passed down from generation to generation, with children working to pay off the debts of their parents or grandparents.

Debt bondage is a pervasive issue that exploits the vulnerabilities of already-marginalized groups. By understanding what debt bondage is and what factors contribute to its occurrence, we can better identify those at risk, intervene, and implement protections. By addressing the economic, social, and legal factors contributing to debt bondage, and by providing comprehensive, trauma-informed support to victims, we work towards protecting the rights and freedom of all individuals.  

‍