This is the last week for Canadian and international businesses to file their annual supply chain reports. With minimal changes from last year's reporting obligations, companies should finalize and file their reports without delay, prior to May 31, 2025.
The Fighting Against Forced Labour and Child Labour in Supply Chains Act ("the Act") obligates certain business and government bodies to report on their efforts to prevent or mitigate the risk that forced labour or child labour is in their supply chains. The reports must be approved by the reporting entity's governing body, filed with Public Safety Canada, and published prominently on the entity's website.1
This year marks the second annual report filing for many entities. Entities should revise reports from last year filings to highlight any updates to the entities' policies, procedures, and efforts to remediate forced labour or child labour, among other factors listed in the Act.
Public Safety Canada's Updated Guidance
Public Safety Canada has released updated guidance ("the Guidance") to provide greater clarity on reporting requirements.2
First, the Guidance clarifies that an entity holding shares or securities in Canada does not mean that the company "holds assets" in Canada. In other words, merely holding shares is insufficient to trigger the reporting requirement. Instead, the Guidance suggests that entities may determine if they are "doing business" in Canada by using factors considered by the Canada Revenue Agency when determining if a person is "carrying on business in Canada" for GST/HST purposes," such as locations where:
- Goods are produced, sold, or distributed;
- Employees are located;
- Deliveries, payments, purchases, or contracts are made or assets are acquired; and
- Assets, inventories, or bank accounts are located.
Next, the Guidance provides an exclusion for "very minor dealings" under the meaning of producing, selling, distributing, and importing goods. While this guidance was in place last year, it has since been amended to reference de minimis principles. Guided by these principles, entities may conduct both a relative and absolute assessment of the value and volume of their imports to evaluate whether they meet the criteria for exclusion.
Finally, following an update from last year's filings, the Guidance makes clear that the true importer is the entity that caused the goods to be brought into Canada. This means that third-parties authorized to transact business or account for goods in lieu of the importer, such as customs brokers, couriers and consultants, will generally not be considered importers.
The submission deadline for the 2025 reporting period is May 31, 2025. McMillan's team continues to offer support for businesses and government entities both in determining their reporting obligations, and in preparing and revising reports.
Footnotes
1. For more details, see our previous bulletin on the Act.
2. For more details, see our previous bulletin on Public Safety Canada's guidance.
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2025
