A U.S. report on human trafficking says Canada has the laws needed to prosecute human traffickers and sex tourists, but the penalties dished out by the courts are lax.

The annual report issued Tuesday by the U.S. State Department also notes criticism by non-governmental organizations that say there isn't enough communication among law enforcement on the problem.

"Canada's law enforcement efforts reportedly suffer from a lack of co-ordination between the national government and provincial and local authorities, which prosecuted most human trafficking cases."

The report recommended Canada give police more clout to investigate trafficking offences before they happen.

"NGOs criticize the government's law enforcement investigation efforts for not being proactive, particularly in terms of searching for victims and trafficking activity," the report says.

It also recommended tougher prosecution of Canadians suspected of committing child sex tourism crimes overseas.

The report noted that over the past year, five Canadians were convicted under the Criminal Code's new provisions against human trafficking, the first convictions since the law went into effect in 2005.

Another 12 anti-trafficking prosecutions were before provincial courts as of April, involving 15 accused offenders.

"Canada is also a source country for child sex tourists, who travel abroad to engage in sex acts with minors," the report said. "Canada is reported to be a destination country for sex tourists, particularly from the United States."

The report placed 52 countries and territories mainly in Africa, Asia and the Middle East on notice that they may face sanctions unless their records improve.