Canada approves supply chain law for large companies

Bill S-211 was approved Wednesday, 271-57, by Canada’s House of Commons. The Canadian Senate approved the bill in 2022.

The law will apply to companies trading on the Canadian stock exchange that meet two of three criteria, including:

• Having $20 million or more in assets;
• Generating at least $40 million in revenue; and/or
• Employing at least 250 people.

The law will require the companies to conduct risk analyses of their supply chains, including products and their components. They must also report to the Minister of Public Safety and Emergency Preparedness by May 31 each year the steps they have taken to mitigate those risks, train employees, and assess the effectiveness of risk reduction. Reports by companies will be made available to the public online.

The ministry has the authority to conduct inspections of businesses suspected of importing tainted goods, if it has cause to do so.

Violations, involving products or their components, could be met with fines up to 250,000 Canadian dollars (U.S. $187,000).

Canada’s supply chain bill follows other recent efforts by nations, including France, Germany, the United Kingdom, and the United States, to reduce goods made with forced labor.

In the United States, the Uyghur Forced Labor Prevention Act took effect in June 2022 and aims to stop the import of products from China’s Xinjiang region, where the Chinese government is accused of forcing Uyghur and other ethnic minorities to work.

World Vision, a nonprofit humanitarian aid group, said in a statement the Canadian legislation would allow the country to “begin confronting child labor and forced labor.” The group noted further controls to reduce forced labor goods are likely, as the latest Canadian budget includes a promise to introduce such legislation in 2024.