Promoting Fair Labour Practices with the New Supply Chains Act (Bill S-211)

Canada is taking concrete steps to fight forced labour and child labour in our supply chains. On January 1, 2024, the Fighting Against Forced Labour and Child Labour in Supply Chains Act, or Bill S-211, came into effect – amending the Customs Tariff Act and creating a ban on importing any goods manufactured or produced by forced or child labour.

The act imposes new public annual reporting obligations on corporations, trusts, partnerships and other unincorporated organizations to ensure they meet certain conditions and outline measures taken to identify, address and prevent forced labour and child labour in their supply chains. Keep reading to learn more about Bill S-211 and how it will impact your reporting this year.

What qualifies as forced and child labour?

The first step to ensure your company is fully compliant is understanding what qualifies as forced and child labour. Child labour is defined as labour or services provided or offered to be provided by persons under the age of 18 under circumstances contrary to Canadian law that are mentally, physically, socially or morally dangerous to them, deprive them of the opportunity to attend school or require them to attempt juggling school with long, heavy work.

Forced labour is labour or services provided or offered to be provided by persons under circumstances that could reasonably be expected to cause the persons to believe their safety, or the safety of a person known to them, would be threatened if they failed to provide or offer to provide the labour or services.

How do you know if your company is required to report on these issues?

This new regulation will require all entities to report under the act. An entity is defined in the act as a corporation or a trust, partnership or other unincorporated organization that is either:

1. Listed on a stock exchange in Canada; or
2. 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. It has at least $20 million in assets
   2. It has generated at least $40 million in revenue
   3. It employs an average of at least 250 employees

Companies that meet the “entity” definition must report and submit to the Ministry of Public Safety by May 31 of each year beginning in 2024. The report must reference the activities undertaken during the company’s previous financial year. All reports will require approval from the company’s governing body through either a statement or the signature of one governing body member. The report must also be made available to the public and easily accessible on the company’s website.

What does the report need to cover?

If your company meets the definition of “entity,” the next step is to determine what information must be listed in the report. There are seven key requirements the report needs to address, including:

1. A breakdown of the company’s structure, activities and supply chains
2. The company’s policies and due diligence processes in relation to forced labour and child labour
3. The parts of the company’s business and supply chains that carry a risk of forced labour or child labour being used and the steps the company has taken to assess and manage that risk
4. Any measures taken to remediate any forced labour or child labour
5. Any measures taken to remediate the loss of income to the most vulnerable families that result from any measure taken to eliminate the use of forced labour or child labour in its activities and supply chains
6. The training provided to employees on forced labour and child labour
7. How the company assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains

Is there a correct way to structure the report?

Now that you know what the report needs to cover, it’s time to determine how you’ll present it. Here are several things to keep in mind when developing your report content:

• A complete report will contain responses that are consistent with the information provided in the questionnaire and should include the attestation with the required signature(s).
• Companies can provide additional information to supplement responses, including links to action plans, policies, a code of conduct or any relevant public disclosures.
• Companies are expected to provide honest responses that describe the concrete actions they have taken to address the risks of forced labour and child labour, rather than purely aspirational statements. The report should focus on actions taken during the previous financial reporting year, with the recognition that some actions may span multiple years.

How do I ensure my report is compliant?

Now that you have all the necessary information, it’s time to ensure your report meets the mark. To ensure your company’s report fully complies with the act, Bill S-211 also requires that the report:

• Includes information addressing each of the legal requirements of the act
• Has received the required approvals and includes the signed attestation
• Does not exceed 10 pages in length, or 20 pages for reports provided in both Canadian official languages (English and French)
• Is a PDF that does not exceed 100MB in size

Once the report is attested, the entity can complete the online questionnaire.

Feeling overwhelmed?

New regulations may seem overwhelming initially, but fortunately, the team at Works Design is here to help – and is already assisting several companies with navigating this new act! If you opt to work with us, we’ll check your eligibility for reporting and assess gaps in your organization’s current disclosures to develop clear, timely communications and ensure a thorough and targeted report. Contact our team today to get started.

Disclaimer: The information provided in this blog does not, and is not intended to, constitute legal advice. Instead, all information is included for general informational purposes only.