Last year, the federal government announced a new Forced Labour and Child Labour in Supply Chains legislation. See our comprehensive guide: Federal Legislation Prohibiting Forced Labour and Child Labour: Corporate Human Rights Behaviour in the Spotlight.
The announced legislation became law on January 1, 2024, preceded by compliance guidelines issued by Public Safety Canada, the responsible ministry.
The following are highlights of the guidance:
Reporting Thresholds – The guidance confirms that the assets, revenue and employee thresholds are global, meaning that assets are not restricted to assets located in Canada, revenue is not restricted to revenue from business activities in Canada and the number of employees includes those residing or employed in Canada or in any other jurisdiction.
Questionnaire – The guidance provides for a new obligation to complete a questionnaire provided on the website of Public Safety Canada which must be submitted with the report. The report needs to be consistent with the information provided in the questionnaire.
Format and Size of the Report – It is recommended that the report does not exceed 10 pages in length, or 20 pages for reports provided in both English and French. The government also recommends filing the report in both official languages. The report includes prescribed language for the signatory to attest that the information in the report is true, accurate and complete in all material respects for the purposes of the Act.
Joint Report – The guidance confirms that when an entity prepares a joint report on behalf of itself and its subsidiaries, each subsidiary covered by the report must be identified. The report should also specify which information applies to which of the entities covered by the report, wherever possible.
Goods and Services – The Act is directed to entities producing, selling or distributing goods and to those importing goods into Canada, but the required disclosure covers all aspects of the supply chain, including direct and indirect suppliers, as well as service providers that contribute to the production of such goods.
Comprehensive Description of Supply Chain – The guidance requires entities to identify to the greatest extent possible the source countries or regions of origin of each of the goods and services used at each stage of the supply chain and to provide a complete overview of their structure, activities and supply chains.
The Act is complex and nuanced, and there are penalties in case of non-compliance. We will be pleased to respond to any questions you may have in order to meet your legal obligations.
Be proactive and plan ahead before the new Act comes into force. Our team can help you develop your strategy and rethink your approach.
