Understanding Canada's Bill S-211: Combating Forced And Child Labour In Supply Chains

Bill S-211, known as the Canada Fighting Against Forced Labour and Child Labour in Supply Chains Act (the "Act"), received royal assent on May 11, 2023 and will come into force on January 1, 2024.

This short article explains who the Bill S-211 affects and how it affects them.

What is Bill S-211?

Bill S-211 is aimed at combating modern slavery in the form of forced labour and child labour. It requires certain private businesses to report yearly on measures taken to prevent the use of these practices in their supply chains.

Bill S-211 also amends the Canada Customs Tariff Act to prohibit Canadian businesses from importing any goods manufactured wholly or partially by forced labour or child labour.

To Whom Does Bill S-211 Apply?

Bill S-211 applies to any entity (being a corporation, trust, partnership, or other unincorporated organization) that produces, purchases, or imports goods in Canada, and:

1. is listed on a stock exchange in Canada; or
2. meets the following requirements:
   1. has a place of business in Canada, or
   2. does business in Canada, or
   3. has assets in Canada; and
   4. meets at least two of the following conditions for at least one of the most recent two financial years:
      1. has at least $20 million in assets;
      2. has generated at least $40 million in revenue; or
      3. employs an average of at least 250 employees.

What Does Bill S-211 Mean for Your Business?

Entities that meet the above-noted criteria must prepare a yearly report and submit it to the Minister of Public Safety and Emergency Preparedness before May 31 of each year. This report must detail the measures implemented by the entity during the prior year to prevent the risk of forced labour or child labour being used in any aspect of the production, procurement, or distribution of goods. The report must also be made available to the public.

The report must include the following information about the entity:

• its structure, activities, and supply chains;
• its policies and due diligence processes in relation to forced labour or child labour being used and the steps taken to assess and manage that risk;
• measures taken to remediate any forced labour or child labour;
• measures taken to address the financial impact on vulnerable families who experience income loss resulting from initiatives aimed at eradicating forced labor or child labor in the entity's operations and supply chains;
• training provided to employees on forced labour and child labour; and
• methods used by an entity to evaluate its success in preventing the use of forced labour and child labour in its supply chains and business operations.

The report must be approved and signed by the primary governing body of the entity (e.g., the board of directors, trustees, general partner, etc.).

What Are the Consequences of Non-Compliance?

Bill S-211 allows the Minister of Public Safety and Emergency Preparedness to make orders in response to non-compliance with the Act and the reporting requirements. For example, the Minister can designate a person with the power to:

• enter an entity's premises to examine documents and computers;
• use any computer system or copying equipment;
• direct the operation or cessation of equipment;
• prohibit access to all or some of the premises;
• remove anything from the premises; and
• draft documents based on data collected from the entity.

Failure to provide a report or comply with a ministerial order issued under the Act can be punishable with a fine of up to $250,000. Director's and officers of corporations can be held personally liable for offences under the Act, even if the offences were committed by an employee or agent.

Takeaways

Bill S-211 imposes strict reporting requirements for certain entities and heavy consequences for non-compliance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.