Forced labour in Canadian supply chains: What you need to know

The Government of Canada recently introduced measures introduced through the Supply Chains Act, which aim to increase industry awareness and transparency and drive businesses to improve practices. Learn more here.

The purpose of the Supply Chains Act is to implement Canada’s international commitment to contribute to the fight against forced labour and child labour through the imposition of reporting obligations on entities producing goods in Canada or elsewhere or importing goods produced outside Canada.

Requirements

Certain entities and government institutions must submit a report to the Minister of Public Safety by May 31 of each year. Reports must detail the steps taken during the previous financial year to prevent and reduce the risk that forced labour or child labour is used by them or in their supply chains.

Who needs to report – potential impact for AIA Canada members

Organizations:

• listed on a stock exchange in Canada; OR
• Who have 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:
  • it has at least $20 million in assets,
  • it has generated at least $40 million in revenue, and
  • it employs an average of at least 250 employees.

An entity is considered to be importing goods into Canada if the entity is responsible for accounting for those goods under the Customs Act. Determining who qualifies as an entity “importing goods into Canada” depends on several factors, including but not limited to who arranged for and placed the purchase order, who paid for the goods, when did title pass, who cleared the goods, what were the terms of delivery, and who was responsible for marketing and distributing the goods.

Entities must determine if they are subject to reporting obligations in accordance with the Act. It is the responsibility of the entity to assess how the Supply Chains Act applies to their specific circumstances. If an entity is unsure whether they meet any of the prescribed application criteria, they are encouraged to seek advice from their legal counsel. For more information on determining whether an entity is a reporting entity, refer to the guidance on the application of the Act.

Process overview

Once an entity has determined that it is required to submit a report under the Act, it must complete a series of steps of the reporting process, including the preparation of a report and completing an online questionnaire ahead of the May 31 deadline. Further guidance can be found here.

Deadline

The first report will be due by May 31, 2024, and must reference the activities undertaken during the entity’s or government institution’s previous financial year.

Looking ahead

Public Safety is focused on education of these new measures. AIA Canada is working with department officials to explore an opportunity for a technical briefing session to provide further clarity and information as we move forward. Further details will be provided once available.

For any questions or inquiries visit publicsafety.ca.