Back in May 2023, the federal government passed Bill S-211, the Fighting Against Forces Labour and Child Labour in Supply Chains Act, in an effort to protect vulnerable populations from human rights abuses and exploitation.
On January 1, 2024, the new bill took effect, imposing strict reporting requirements on Canadian businesses and the first reporting deadline is May 31, 2024.
Shawn Mincoff, a partner at MNP, highlighted the multifaceted impacts of Bill S-211 on companies, emphasizing that businesses who don’t take the time to fully understand the new legislation could face significant consequences.
“There are many factors in relation to Bill S-211 that are going to affect a lot of companies,” Mincoff noted. “The bill features different levels that, if not analyzed carefully, could turn opportunities into threats for businesses of all sizes.”
How does Bill S-211 impact Canadian business?
Bill S-211 will have significant impact on the way your businesses contracts within the supply chain, how it produces, sells, or distributes goods, and how it controls an entity engaged in either of the above activities.
The bill encourages organizations to re-evaluate and accelerate their environmental, social, and governance (ESG) strategies. If you haven’t already, it is essential to review your organization’s current ESG strategy to ensure the material topics you’ve identified in your social pillar align with these new regulations.
Ed Olsen, MNP’s Bill S-211 lead, stressed the urgency for collective action in combating modern slavery and child labour, citing statistics that underscore the importance of such legislation.
“There has been an alarming 20 percent increase in the number of people living in conditions of modern slavery over the past few years, totalling over 50 million people worldwide,” Olson said.
“That staggering figure, coupled with 160 million victims of child labour worldwide, illustrates how critical the need for action is. Bill S-211 represents a vital step forward, but it’s just the beginning.”
What requirements does my business need to meet?
Canadian businesses are now required, under Bill S-211, to report on forced labour and child labour in supply chains. It outlines the steps organizations must take to prevent and reduce the risk that operations, including those of third parties within the supply change, make use of forced and/or child labour.
The Bill also amends the Customs Tariff to allow for a prohibition on the importation of goods manufactured or produced, either in whole or in part, by forced labour or child labour.
With the first reports required to be filed on or before May 31, 2023, now is the time to ask these two questions:
Does Bill S-211 apply to my organization?
If it does apply, have we started to assess how the organization prevents and reduces the risk that forced or child labour was used at any step in the production of our goods?
Organizations that fail to submit a satisfactory annual, don’t make the report public, obstruct a designated official, or fail to comply with an order from the minister are guilty of a summary offence and could face a fine of up to $250,000.
This is especially important for senior executive teams and boards of directors to take note of as every director or officer who directed, authorized, assented to, acquiesced, or participated in any of these offenses will also be personally liable.
Is my business prepared to meet the reporting requirements?
If you haven’t already, now is the time to accelerate your ESG strategies and perform due diligence within each tier of your supply chain to determine if the practices are compatible with your standards and values.
MNP’s robust ESG practice and experienced advisors can assist you and your organization to create or refine that ESG strategy.
If you need guidance developing a framework to meet Bill S-211’s requirements, contact Shawn Mincoff, Partner, Assurance – PubCo, at shawn.mincoff@mnp.ca or 613.691.4266
