Canada Passes Legislation on Forced Labor and Supply Chain Due Diligence
Canada joins a number of major trading partners taking a stronger stance on forced labor after passing legislation known as Bill S-211, An Act to Enact Fighting Against Forced Labor and Child Labor in Supply Chains and to Amend Customs Tariff, on May 3, 2023.
This law requires many companies that do business in Canada to provide public annual reports on their efforts to eliminate the use of forced labor in their supply chains.
Our summary of Canada’s legislation, including the entities subject to the new law as well as the reporting requirements, can be found here.
The legislation enters into force January 1, 2024, and companies will be required to report their supply chain diligence efforts for the previous calendar year by May 31, 2024.
Significantly, while the new law requires certain entities to report, S-211 does not require the companies to take action to remediate their supply chains. Canada is expected to take further steps in the months ahead to curb the use and import of products produced by forced labor. The remarks by Canada’s Labor Minister Seamus O’Regan are indicative: “S-211 means you have to look... Where I think government legislation will come in is, ‘Okay, you’ve looked now. What are you doing about it?’ But the idea is that the onus is on you to make sure that you do something.”
The passage of S-211 is related to Canada’s obligations under the United States-Mexico-Canada Agreement (USMCA), along with Mexico and the United States, albeit their individual efforts are not similar in application or approach. The USMCA included new provisions that prohibit imports into the USMCA regions of goods made or suspected of being made by forced labor. Additionally, the USMCA establishes a co-operation mechanism among the three countries, which can be found at Labor Chapter of the USMCA (Chapter 23).
For companies doing business in North America, this latest action will be important to incorporate into supply chain due diligence and import compliance strategies.
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