New reporting obligations for forced and child labour

As of January 1, 2024, certain private-sector entities and government institutions must now report on the measures taken to prevent and reduce the risk that forced labour or child labour is used by them or in their supply chains.

Entities that fail to comply with Bill S-211, Fighting Against Forced Labour and Child Labour in Supply Chains Act, by May 31, 2024, may be found guilty of an offence and liable to a fine of up to $250,000.

Who does this apply to?

Entities

Any corporation, trust, partnership or other unincorporated organization that:

• is listed on a stock exchange in Canada

OR

• has a place of business in Canada, does business in Canada, or has assets in Canada, and meets two of the following three criteria for at least one of its two most recent financial years:

- $20 million or more in assets
- $40 million or more in revenue
- an average of 250 or more employees

Government institutions

Any government institution producing, purchasing or distributing goods in Canada or elsewhere.

When does the report have to be submitted by?

The first report will be due by May 31, 2024, and must reference the activities undertaken during the previous financial year.

What are the steps required for the reporting process?

1. Prepare a report - Reporting entities must develop a report that meets all of the requirements of the Act.
2. Approval and attestation - Once a report is complete, the report must receive approval from the appropriate governing body or bodies who have the legal authority to bind the entity or entities.
3. Complete online questionnaire - Once the report is attested, entities must complete the online questionnaire.
4. Upload completed report - At the end of the questionnaire, entities must upload their attested report(s) in PDF format.
5. Publish report to entity’s website - Entities must publish their submitted report on a prominent place on their website.

What information is needed for the report?

The mandatory information required in the report to be submitted to the Minister of Public Safety is:

• The steps the entity has taken during its previous financial year to prevent and reduce the risk that forced labour or child labour is used at any step of the production of goods in Canada or elsewhere by the entity or of goods imported into Canada by the entity
• Its structure, activities and supply chains
• Its policies and due diligence processes in relation to forced labour and child labour
• The parts of its business and supply chains that carry a risk of forced labour or child labour being used and the steps it has taken to assess and manage that risk
• Any measures taken to remediate any forced labour or child labour
• Any measures taken to remediate the loss of income to the most vulnerable families that results from any measure taken to eliminate the use of forced labour or child labour in its activities and supply chains
• The training provided to employees on forced labour and child labour
• How the entity assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains

What are the potential penalties for failing to comply?

Every person or entity that fails to comply, or knowingly provides false or misleading information, may be found guilty of an offence punishable by a fine of up to $250,000.

Additionally, any person who directed, authorized or participated in the report’s commission is also guilty of the offence and liable (on conviction) to the punishment provided for the offence.

Questions?

If you have any questions about this article, reporting obligations for forced and child labour, or any of our related services, please contact Zach Keith or complete the contact form below.