Canada's S-211 Supply Chain Forced Labour & Child Labour Reporting Requirements - Last Updated: January 2, 2024

As an international economic, business, and cultural hub, Canada is an important region for environmental, social and governance (ESG) laws, regulations, and human rights protections. In 2023, Canada's Parliament took that a step further by passing An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff (Bill S-211), a new law focused on fighting and preventing forced labour, child labour, prison labour, and human rights violations in corporate supply chains.

Bill S-211 passed in Parliament on May 3, 2023, and took effect on January 1, 2024 after receiving royal assent. This article provides an overview of the Forced Labour in Canadian Supply Chains Act (S-211)'s regulatory requirements and compliance steps. These requirements may be subject to change, and we'll do our best to keep them updated as reporting requirements evolve.

An Overview of Canada's Forced Labour in Canadian Supply Chains (S-211) Act

Canada S-211 Reporting Regulations

Canada's S-211 Act applies to large companies and entities doing business in Canada starting in 2024. It requires eligible entities to comply with certain ESG reporting and supply chain due diligence provisions

In effect: January 1, 2024. First S-211 reports are due on or before May 31, 2024

The passage of Act S-211 is a significant step forward in Canada's fight against forced labour and child labour. The new law will help to ensure Canadian businesses (and international businesses importing and/or doing business in Canada) are taking steps to prevent these abuses from occurring in their supply chains. The new Act (S-211) also imposes reporting obligations on eligible Canadian businesses and importers that meet certain thresholds. These businesses will be required to file detailed, annual public reports on measures they have taken to identify, address and prevent forced labour, prison labour and child labour in their supply chains.

S-211: Which Businesses, Companies, and Entities are Eligible and Required to Report?

Bill S-211 requires businesses that meet certain criteria to file detailed public reports on measures they have taken to identify, address, and prevent forced labour, prison labour, and child labour in their supply chains.

S-211 applies to companies and entities who:

  • Produce, sell, and/or distribute goods in Canada
  • Import goods into Canada
  • Control one or more entities doing either of the above two activities

That also meet the following eligibility threshold(s:

  • Are publicly listed on a stock exchange in Canada (like the TSX)
  • Has a place of business in Canada, does business in Canada, or has assets in Canada and meets at least two of these three conditions in at least one of its last two financial years:
    1. Has over C$20 million in assets
    2. Generated over C$40 million in annual revenue
    3. Employed 250 or more employees
  • Or is otherwise required to report under S-211 by law

Eligibility for a reporting entity is based on its consolidated financial statements. S-211 also applies its reach to international businesses operating in Canada as well as Canadian federal government insitutions, ministries, and departments.

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S-211: Supply Chain Human Rights, Forced Labour and Child Labour Reporting and Compliance Requirements

The following disclosures must be included in a reporting entity’s annual public report and be submitted to the Minister of Public Safety and Emergency Preparedness (Public Safety Canada) by May 31, 2024:

  • The reporting entity’s structure, activities, and supply chain(s)
  • Its policies and due diligence processes in relation to forced labour, child labour, and prison labour
  • The parts of its business and supply chains that carry a risk of forced labour or child labour being used, and the steps taken to assess and manage that risk
  • Any measures taken to remediate any forced labour or child labour
  • Any measures taken to remediate the loss of income to the most vulnerable families that results from any measure taken to eliminate the use of forced labour or child labour in its activities and supply chains
  • Any training provided to employees on forced labour and child labour
  • How the entity assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains

Disclosures must be submitted annually to the Minister of Public Safety and Emergency Preparedness (Public Safety Canada), starting May 31, 2024. Organizations that do not submit public reports that meet all of Bill S-211’s requirements, or do not comply with designated officials who have the right to conduct audits and search property, may be fined up to $250,000.

Bill S-211 also aligns itself with recent supply chain due diligence and human-rights focused laws in the EU a target topic for ESG legislation, such as the German Supply Chain Due Diligence Act, known in German as Lieferkettensorgfaltspflichtengesetz (LkSG).

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How to Submit an S-211 Report

According to the Canadian Government, once an entity's determined it's required to submit an S-211 report, it must complete the following steps of the reporting process ahead of the May 31 deadline:

  • Prepare an S-211 report - Reporting entities must develop a PDF report that meets all the requirements of the S-211 Act. Organizations are welcome to customize and brand their reports, provided the required disclosure items and commentary are included. Entities are expected to collect the information needed to complete their report, based on the Ministry's current published guidelines
  • Complete report approval and attestation - Once an S-211 report is finalized, the report must be approved by the appropriate governing body or bodies who have legal authority to bind the entity or entities, such as the entity's board of directors. This signed attestation must be included in the final PDF version of the report an entity submits to the government.
  • Complete the mandatory S-211 online questionnaire - Once an S-211 report is attested, entities must complete a mandatory online questionnaire. The survey includes a series of open and closed-ended questions that address different aspects of the Act, as well as general demographic questions.
  • Upload the completed S-211 report as part of the entity's survey response - At the end of the required online S-211 survey, entities must upload their attested report in PDF format before submitting their responses, ahead of the May 31 deadline. Once entities complete and submit the questionnaire, including the report in PDF format, a confirmation message acknowledging their submission will appear
  • Publish the S-211 report to the entity's public website - The final compliance step requires publishing the same S-211 PDF report on a prominent place on the reporting entity's website. A copy of the report uploaded through the questionnaire will also be made publicly available by Public Safety Canada in a searchable online database.

A valid S-211 report must meet all of the following requirements, in order to fully comply with the Act:

  • Include all the information required to address each of the legal disclosure requirements in subsections 11(1) and 11(3) of the Act
  • Has received the required approvals and signed attestation
  • Does not exceed 10 pages in length in English, or 20 pages for reports provided in both Canadian official languages (English and French)
  • Is a PDF file that does not exceed 100MB in size

According to the Canadian Government, the online questionnaire may be used as a report template or guide for developing reports, but reporting organizations are also welcome to include additional information and supplementary content (like charts, graphs) at their discretion, provided the report does not exceed the required length and file size limits.

A Few Helpful Recommendations for Canadian Companies and Entities Preparing for S-211 Reporting

Your Next Steps With ESG Reporting in Canada

Global attitudes, stakeholder expectations, proxy voting trends, and shareholder activism in relation to ESG issues have evolved significantly in recent years, a trend we expect will continue. As a result, we anticipate the Canadian government and Canadian regulatory authorities will continue to enact and adopt additional ESG rules and reporting requirements. If your organization doesn't already have robust visibility into its supply chain, supplier due diligence, data collection, and S-211 disclosure preparations should be priorities for your organization.

For organizations in the early stages of their supplier due diligence and ESG reporting work, or planning an IPO on the TSX, we have a few general recommendations, additional reading, and suggested next steps for organizations assessing their S-211 preparation and exposure:

ESG leadership structure - Ultimately, the board has a responsibility to oversee ESG issues, and to assess a company's ESG risks, including supply chain risks. Clarify the board's role, structure, and processes around ESG, including which committee(s) will review and decide on ESG matters. Your company will likely also want to set up one or more ESG working groups, comprising senior management and staff, to report to the board. One of the requirements under S-211 is that annual disclosure reports are reviewed and approved by the entity's governing body, such as its board of directors.

Understand S-211 in depth - Review Bill S-211 in detail with your legal council. Make sure you understand and confirm your organization's eligibility, compliance obligations, and disclosure requirements.

Conduct a supply review and risk assessment - Assess, analyze, and understand the part(s) of your company's supply chain that may carry a risk of forced labour, child labour, and/or prison labour. Risk factors may relate to sourcing from specific regions, companies, and industry segments, which an overall supply chain due diligence, audit, and risk management program should be in good position to assess and spotlight problem areas.

ESG and supply chain data systems and process - While this might go without saying, in order to report your organization's supply chain risk information, you need to know what it is - with a high degree of accuracy. Your supplier assessment(s) will help guide you toward focus areas where you need to conduct audits and collect data around, but make sure you're storing that information, any related documentation, and your overall S-211 annual disclosure reporting in a safe, central, well-controlled and governed system. Many organizations start their ESG and supply chain reporting with relatively simple spreadsheets, surveys, and documents, but things can get complex fast - particularly for larger companies and complex value chains. If you're an organization with a medium-to-large or complex supply chain, you likely need dedicated ESG and supplier data management software, like the kind we design here at Brightest to help organizations stay compliant with international ESG reporting requirements. Ongoing S-211 report archiving, version control, audit readiness, and governance are all important to think about if you're reporting annually.

Further reading - Our free guides to supply chain due diligence and starting an ESG reporting program provide additional, detailed guidance and insights on how to approach, prepare, and stay compliant with S-211 reporting.