Bill S-211: Fighting Against Forced Labour and Child Labour

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 (the “Act”) received royal assent from Canada’s House of Commons on May 11, 2023, and is scheduled to take effect on January 1, 2024.

The Act is significant as it codifies international human rights principles into Canadian law through two primary components: reporting obligations and changes to the Customs Tariff.

First, the Act imposes a requirement on specific government bodies and private-sector entities to disclose their efforts in preventing and addressing the use of forced labour or child labour, whether within their own operations or within their supply chains. The Act also establishes an inspection framework and empowers the Minister of Public Safety and Emergency Preparedness (the “Minister”) to request specific information from these entities.

Second, the Act makes amendments to the Customs Tariff to now include “child labour” within the prohibition of importing goods that are manufactured or partially produced using forced labour.

Reporting Obligations for Private-Sector Entities

Once the Act is in effect, employers (including government institutions that produce, purchase or distribute goods in Canada or elsewhere) will need to submit an annual report to the Minister by May 31^st of each year.

The Act defines private-sector entities to include a corporation or a trust, partnership or other unincorporated organization that:

• is 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:
  1. has at least $20 million in assets;
  2. has generated at least $40 million in revenue;
  3. employs an average of at least 250 employees; or
• is prescribed by regulations.

For private-sector entities, the report will need to include the following:

1. Information about the entity’s structure, activities and supply chains;
2. An explanation of the entity’s policies and due diligence processes related to forced labour and child labour;
3. An identification of the parts of the activities and supply chains where there is a risk of forced labour or child labour, and the steps taken to assess and manage that risk;
4. A description of any measure taken to remedy instances of forced labour or child labour;
5. An outline of any measures taken to remediate the loss of income to the most vulnerable families that results from measures taken to eliminate the use of forced labour or child labour in its activities and supply chains;
6. Information about training provided to employees regarding forced labour and child labour; and
7. An explanation of how the entity assesses its effectiveness in ensuring that forced labour and child labour are not used in its business and supply chains.

The Minister has an obligation to maintain a public registry of all reports received. In addition to reporting to the Minister, the entity or government institution must ensure that the report is publicly accessible, which involves prominently posting it on its website. Entities under the Canada Business Corporations Act or any other federal legislation are also obliged to distribute the report to every shareholder in addition to providing their annual financial statements.

Penalties for Non-Compliance

This legislation reflects Canada’s commitment to combat modern slavery and ensure ethical supply chain practices. Directors, officers and agents of entities are accountable for compliance with the Act. Non-compliance can result in fines or other corrective orders which can create significant operational hurdles.

The key takeaway for employers is that they should proactively assess and manage the risk of forced and child labour within their operations and supply chains through implementing policies, due diligence processes and remediation measures. Employers involved in importing goods should ensure that they are compliant with the amendments to the Customs Tariff, which prohibit the importation of goods produced using forced labour or child labour.

Aird & Berlis will continue to monitor any developments with respect to Bill S-211. Do not hesitate to reach out to a member of the Workplace Law Group with any questions.