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What Bill S-211 Legislation Means for Manufacturers

"There is a risk that goods imported into and distributed in Canada were produced with forced labour or child labour. Entities and government institutions doing business in Canada have a responsibility to ensure that exploitative practices are addressed and eradicated from their supply chains.” Public Safety Canada

The Fighting Against Forced Labour and Child Labour in Supply Chains Act came into effect on January 1, 2024. The purpose of the measures introduced through former Bill S-211 are to increase industry awareness and transparency and drive businesses to improve their practices.

According to Public Safety Canada, “Forced labour can be found in every country and every sector. The International Labour Organization estimates that there are approximately 27.6 million victims of forced labour worldwide, including 17.3 million in the private economy. Forced labour and child labour risks occur primarily through the global supply chains of businesses.”

After receiving many questions from Southwestern Ontario EMC members around Fighting Against Forced Labour and Child Labour in Supply Chains Act legislation, EMC asked Nic Preston, of Preston Legal, Workplace Lawyers to present an overview and framework around what this legislation means to manufacturers and what they need to do. The June 19, 2024 presentation was facilitated by EMC’s Jason Bates.

Key takeaways from the presentation:

What is the purpose of the Fighting Against Forced Labour and Child Labour in Supply Chains Act?

  • The aim of the Fighting Against Forced Labour and Child Labour in Supply Chains Act is to prevent forced labour or child labour in supply chains in Canada.

What is forced labour / child labour?

  • Providing labour or services contrary to the laws of Canada
  • Working under mentally, physically, socially or morally dangerous circumstances
  • Interfering with schooling; depriving children (younger than 18 years old) of the opportunity to attend school; forcing them to leave school prematurely
  • Attempting to force children to combine school attendance with excessively long and heavy work

Who must comply? Businesses/subsidiaries that are producing, selling or distributing goods in Canada or elsewhere, importing into Canada goods produced outside Canada or controlling such an entity, and are listed on a stock exchange in Canada or

  • have a place of business in Canada
  • do business in Canada
  • have assets in Canada
  • meet 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, and/or 250 or more employees.

Entities that are near the threshold of needing to comply should start taking the necessary measures now in order to ease future compliance requirements.

What are the requirements of the Act? The Act requires that certain entities must submit a report to the Minister of Public Safety by May 31 each year that includes information such as the following (not a comprehensive list):

  • structure, activities, areas of business and supply chains that carry a risk of forced or child labour
  • policies and due diligence processes to combat forced or child labour
  • training provided to employees on forced labour and child labour

The report must be made available and accessible to the public and published in a prominent place on the entity’s website. Entities with reporting obligations must also complete this questionnaire which will require that the report be attached as a PDF.

What is the status? The Act came into effect January 1, 2024. The first reports were due May 31, 2024; however, reports are still being accepted after the deadline.

How is the act being enforced? The Act is being enforced two ways:

  1. The Minister of Public Safety can require entities to provide information.
  2. The Canada Border Services Agency (CBSA) may prevent goods manufactured or produced by forced or child labour from being imported.

The maximum fine is $250K, and can include liability for directors and officers of the entity.

What are the practicalities? In general, entities will need to:

  • Insert anti-forced labour and child labour clauses into all supply agreements and terms of business. It is recommended to make these terms subject to an audit.
  • Document all supply chains, external assessments, due diligence policies, and training
  • Require suppliers to warrant and agree to have anti-forced labour and child labour clauses in their supply agreements.
  • Rake their suppliers compliance subject to an audit which they can exercise or rely upon to ensure compliance.
  • It is also recommended to include termination clauses in the event of any of the following:
  • The CBSA determines that goods are in conflict with the Customs Tariff prohibition on the importation of goods produced wholly or in part by forced labour.
  • Credible information is made available that goods were produced in whole or in part by forced/child labour.
  • The supplier has been convicted of human trafficking in Canada or abroad.

Where can you find more information? Public Safety Canada provides many online resources such as the following:

To stay informed about legislation and topics that affect manufacturers, register for upcoming presentations developed exclusively for EMC members. Click here to view upcoming events.

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