Companies Must Report on Forced Labour Risks

Summary#

This bill would require certain companies to report each year on steps they take to prevent and reduce the risk of forced labour and child labour in their supply chains. It sets inspection and enforcement powers, public reporting, and fines for non‑compliance. It also directs the federal procurement minister to reduce these risks in government purchasing and expands a customs ban to cover goods made with child labour.

• Annual supply‑chain report due by May 31, approved and signed by the company’s governing body, and posted publicly (s.7, s.9).
• Applies to listed companies and larger firms that meet size thresholds, and to importers and parent companies that control covered entities (definition of “entity”; Application).
• Public Safety must keep a public registry of all reports (s.10).
• Inspectors can examine records; the minister can order corrective measures; fines up to $250,000 for violations or false statements (s.12–s.15, s.17).
• Federal procurement must reduce the risk of forced or child labour and report yearly to Parliament (Dept. of Public Works and Government Services Act amendment).
• Customs Tariff updated to prohibit imports made wholly or partly with child labour, in addition to forced labour (Customs Tariff amendment, tariff item 9897.00.00).
• Comes into force January 1 of the year after Royal Assent (Coming into Force).

What it means for you#

• Households and consumers

  • You can read company reports on a public federal registry and on company websites (s.9, s.10).
  • Goods made with child labour would be prohibited from import, as with forced‑labour goods (Customs Tariff amendment).

• Workers and shareholders

  • Shareholders of covered corporations must receive the report with annual financial statements (s.9(2)).
  • Board members must approve and manually sign the report, increasing oversight responsibility (s.7(3)).

• Businesses (manufacturers, retailers, importers)

  • If you are an “entity” (listed in Canada, or have Canadian business/assets and meet at least two of: CAD $20 million in assets, CAD $40 million in revenue, 250 employees), you must file an annual report on your policies, risks, due diligence, training, remediation, and how you assess effectiveness (definition of “entity”; s.7(2)).
  • Parent companies must also report on controlled subsidiaries (Application; s.7(1)).
  • You must post the report on your website and provide it to shareholders if you are a corporation (s.9).
  • If information changes, you must file a revised report as soon as feasible, with the revision date and description of changes (s.8).
  • The minister may set the required form and manner of reporting (s.7(4)).
  • Inspectors can review documents and data on site; you must provide reasonable assistance (s.12). A warrant is required to enter a dwelling‑house (s.13).
  • Non‑compliance, obstruction, or making false statements can lead to fines up to $250,000; officers and directors can be personally liable if they directed or allowed the offence (s.14, s.17, Liability of officers clause).

• Federal departments and suppliers to government

  • The procurement minister must ensure the risk of forced or child labour is prevented or reduced for goods and services bought for departments, and must table an annual report by October 1 (Dept. of Public Works and Government Services Act amendment).
  • Suppliers may face tighter contract requirements to address these risks. Specific terms are not in the bill text. Data unavailable.

• Timing

  • Annual company reports due by May 31 each year (s.7(1)).
  • Minister’s aggregate report to Parliament due by September 30 each year (Report to Parliament).
  • Procurement report due by October 1 each year (Dept. of Public Works and Government Services Act amendment).
  • The Act starts on January 1 of the year after Royal Assent (Coming into Force).

Expenses#

• Estimated net cost: Data unavailable.

• No explicit appropriations in the bill text. Data unavailable.

• New federal duties:

  • Maintain a public registry, receive and review reports, conduct inspections, issue orders, and table an annual summary report (s.10; s.11–s.15; Report to Parliament). Data unavailable.
  • Federal procurement risk‑reduction program and annual report (Dept. of Public Works and Government Services Act amendment). Data unavailable.

• Penalties:

  • Fines up to $250,000 per offence for non‑compliance or false statements (s.17). Potential revenue is unpredictable. Data unavailable.

• Private‑sector compliance costs:

  • Preparing and approving annual reports, training, and due diligence activities (s.7(2)–(3)). Data unavailable.

Proponents' View#

• Improves transparency and accountability by requiring public reporting, a federal registry, and board‑level approval and signature (s.7–s.10).
• Targets larger and listed firms most likely to have complex supply chains, using clear size thresholds (CAD $20 million assets, CAD $40 million revenue, 250 employees) (definition of “entity”).
• Strengthens enforcement with inspection powers, corrective orders, and fines up to $250,000; extends liability to officers and directors to deter non‑compliance (s.12–s.15; s.17).
• Aligns with Canada’s ILO commitments by addressing both forced and child labour and by adding a child‑labour import ban to the Customs Tariff (Preamble; Customs Tariff amendment).
• Leverages federal buying power by requiring procurement to reduce these risks and to report annually, which may shift supplier practices (Dept. of Public Works and Government Services Act amendment).
• Requires government to publish an annual summary of reported risks and actions, creating an evidence base for future improvements and a 5‑year legislative review (Report to Parliament; Review of the Act).

Opponents' View#

• Reporting‑only design may lead to “box‑ticking.” The Act requires disclosure but does not impose a duty to achieve specific outcomes beyond reporting and accessibility (Purpose; s.7–s.9).
• Compliance burden may be high for mid‑sized companies that meet thresholds, given annual board approval, website posting, shareholder distribution, and possible revised reports (definition of “entity”; s.7–s.9).
• Enforcement capacity risk: broad inspection powers and new registries may strain resources without dedicated funding in the bill text (s.10–s.12). Data unavailable.
• Penalties may be too low to deter large firms; the maximum CAD $250,000 fine may be modest relative to large company revenues (s.17). Assumption noted.
• Scope uncertainty: the Governor in Council can change which entities are covered and what “control” means by regulation, creating planning risk for businesses (s.16).
• Trade and logistics risk: adding a child‑labour import ban could lead to delayed or denied imports if goods are suspected of being made with child labour (Customs Tariff amendment). Magnitude uncertain. Data unavailable.