Bill S-211, An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff (Act), was passed on May 3, 2023, by 271 yeas to 57 nays. The Bill received Royal Assent on May 11 and will come into force on January 1, 2024. There have historically been speculations that the enforcement of some or all requirements may be delayed, and this has recently apexed to Canadian industries pushing for a one-year extension in the summer of 2023. Public Safety Canada has stated that changing the deadline is not anticipated.
Essentially, this bill is a supply-chain transparency law and it requires private-sector entities to release publicly available annual reports on how they identify, address, and prevent forced, prison and child labour in their supply chain. A private-sector entity is defined as:
Listed on a stock exchange in Canada;
Has a place of business in Canada, does business in Canada or has assets in Canada and that, based on its consolidated financial statements, meets at least two of the following conditions for at least one of its two most recent financial years:
Has at least $20 million in assets,
Has generated at least $40 million in revenue, and
Employs an average of at least 250 employees; or
Prescribed by regulations. (entité)
As for the report itself, beginning in 2024, the entity must submit an annual report before May 31 to the Minister of Public Safety and Emergency Preparedness. Additionally, the report must be publicly available and published on the entity’s website. The report must include, in respect of the government institution:
Its structure, activities and supply chains;
Its policies and due diligence processes in relation to forced labour and child labour;
The parts of its activities 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; and
How the government institution assesses its effectiveness in ensuring that forced labour and child labour are not being used in its activities and supply chains.
Moreover, the Bill’s amendments to the Customs Tariff are also impactful to private-sector entities. Bill S-211 defines and includes “child labour” and offers a new definition of “forced labour” to the Customs Tariff. Not to mention, the Customs Tariff was weakly enforced by the Canada Border Service Agency (CBSA) prior to the introduction of Bill S-211, hence it is likely that there will be more public and policy focus on the import of goods. Ultimately, the government is likely to prioritize the enforcement of the import ban.
How to Prepare Your Company
The expanded scope of the Customs Tariff will impact businesses that import goods or use imported goods, so businesses should review supply chains, especially as new reports emerge about goods being produced by forced labour closer to home. Importantly, businesses will have 90 days to report that imported goods are prohibited by the import ban in their customs declaration.
Other ways to prepare your business before Bill S-211 comes into force are to:
Review supplier and business partner relationships;
Conduct risk assessment of the supply chain;
Review and implement up-to-date policies and best practices related to forces or child labour and remediation; and
Implement training and education programs on forced and child labour for employees.
Status of Bill
The Bill still lacks clarity only months before its enforcement on 1 January 2024. In August of 2023, Canadian companies, specifically lobby groups representing mining companies and apparel manufacturers, are pushing back on the January timeline because of the Bill’s lack of details.
John McKay, the Liberal member of parliament who moved the bill, also expressed concerns about implementation. McKay said there was a lack of reporting and procedural guidelines, which he said were signs that the government was not prepared to meet the January launch date.
While companies are preparing paperwork regarding the sourcing of goods (see How to Prepare Your Company), the crux of the issue lies in the uncertainty of how to submit their annual report. Public Safety Canada has released general guidelines for the report, however, the anticipated release of government guidance on the exact format of the report, and its website version may be further specified by government guidance in the fall of 2023.
We are closely monitoring the release of the specific guidelines for companies’ annual reports to Public Safety Canada.
Dariya Akhova is completing her master’s degree at the Munk School of Global Affairs and Public Policy at the University of Toronto. She obtained her bachelor’s degree in Political Science at the University of Ottawa, where she studied in French and English. Dariya also participated in exchanges in Paris, France and Berlin, Germany.