Are You Compliant with Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act?

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Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Act”), formerly known as Bill S-211, is the country’s new legislation intended to combat modern slavery. Enacted in 2023, this Act addresses the presence of forced and child labour in global supply chains, requiring companies to report the measures they have taken to monitor, protect against, and reduce modern slavery. The Act applies to goods, not services.

Who Must Comply with the Act?

The Act applies to business entities that are a corporation or a trust, partnership or other unincorporated organizations that meet any of the following criteria:

  1. Listed on Canadian stock exchanges;
  2. Have a place of business in Canada, conduct business in Canada, or have assets in Canada;
  • Meet at least two of these conditions for at least one of their two most recent financial years:
    1. Have at least $20 million in assets
    2. Generated at least $40 million in revenue
    3. Employ an average of at least 250 employees

Additionally, the business entity must fall under one of the following to trigger reporting obligations:

  1. producing, selling or distributing goods in Canada or elsewhere;
  2. importing into Canada goods produced outside Canada; or
  • controlling an entity engaged in any activity described in paragraph (a) or (b).

Reporting Obligations

If your business falls under these categories, you have a reporting obligation. By May 31st each year, covered employers must report to the Minister on the steps taken during the previous financial year to prevent and reduce the risk of forced labour or child labour in the production of goods either within Canada or imported into Canada. The report must include:

  • The entity’s structure, activities, and supply chains
  • Policies and due diligence processes related to forced and child labour
  • Identification of business and supply chain areas at risk of forced or child labour and the steps taken to manage that risk
  • Measures taken to remediate any instances of forced or child labour
  • Measures taken to address income loss to vulnerable families resulting from the elimination of forced or child labour
  • Training provided to employees on forced and child labour
  • Methods used to assess the effectiveness of ensuring no forced or child labour is present in business and supply chains

Approval Process

The report must be approved by:

  • The governing body of a single entity for individual reports, or
  • The governing body of each entity or the controlling entity for joint reports

There is no prescribed level of detail for the responses, but the Government advises that employers should use discretion and aim for a report generally not exceeding ten pages, proportionate to their size and risk profile.