Justice Minister Peter MacKay has introduced a new prostitution bill in Ottawa.
"The sale and the purchase of sex has never been illegal in Canada. That changes today," he told reporters.
MacKay says the government will criminalize those who are "fuelling and perpetrating" the demand for the trade, the purchasers of sexual services, and those who advertise the sale of sexual services.
The government will also set aside $20-million to help sex trade workers leave the trade.