The Fighting Against Forced Labour and Child Labour in Supply Chains Act (Bill S-211 or the Supply Chains Act) took effect on January 1, 2024. This legislation imposes strict reporting requirements on Canadian businesses with the aim of reducing the risk of child or forced labour within supply chains utilized by Canadian entities. The primary goal is to safeguard vulnerable populations from human rights abuses and exploitation.
This emerging regulatory landscape impacts both publicly traded entities and large private companies, urging them to prioritize the “social” aspect of Environmental, Social, and Governance (ESG) considerations as a central tenet of their business strategies.
The Supply Chains Act outlines specific steps that organizations must take to prevent and mitigate the risk of operations, including those of third parties within the supply chain, utilizing forced and/or child labour. Affected organizations are mandated to submit formalized reports by May 31, 2024.
The Supply Chains Act also amends the Customs Tariff to allow for a prohibition on the importation of goods manufactured or produced, in whole or in part, by forced labour or child labour.
Organizations that fail to submit a satisfactory annual report or make it public, obstruct a designated official, or fail to comply with an order from the Minister are guilty of a summary offence and liable to a fine of up to $250,000.
Senior executive teams and boards of directors also need to take note as every director or officer who directed, authorized, assented to, acquiesced, or participated in any of these offences will also be personally liable for the offence.
Public Safety Canada has issued new guidance pertaining to this complex issue, to reinforce the importance of compliance with the reporting requirements outlined in the bill, and to provide support to entities obligated to comply. Learn more about the reporting obligations, process and requirements for preparing and submitting a report, and find resources on the Public Safety Canada website.
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