What U.S. Businesses Need to Know About Canada’s Forced and Child Labour Reporting Law
As of January 1, 2024, Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (Bill S-211) introduces strict compliance and reporting obligations for any company that produces, sells, or distributes goods in Canada—including U.S. businesses exporting products to Canadian retailers.
If your company manufactures, imports, distributes, or sells food, apparel, electronics, consumer goods, or raw materials in Canada, you must comply with Bill S-211. Failure to do so can result in significant financial penalties and damage your company’s reputation.
Who Must Comply with Bill S-211?
Bill S-211 applies to any company—Canadian or foreign—that produces, sells, or distributes goods in Canada, including U.S. businesses that ship products to Canadian retailers.
You must comply with Bill S-211 if your business meets one or more of the following criteria:
You are a U.S. company that exports products to Canada for resale through retailers, wholesalers, or distributors. You manufacture goods that are sold in Canada, either directly or through third-party vendors. You are listed on a Canadian stock exchange, regardless of where your company is headquartered. You meet at least two of the following three conditions in at least one of your last two financial years:
- $20 million CAD or more in assets.
- $40 million CAD or more in revenue.
- 250 or more employees. You are a Canadian government institution importing goods into Canada.
If your U.S. company ships goods to Canada for resale, you are legally required to follow this law—even if your headquarters and supply chains are outside Canada.
Key Compliance Requirements for U.S. Companies
1. Mandatory Annual Reporting (Deadline: May 31 Each Year)
All affected businesses must submit a public annual report to Public Safety Canada by May 31 each year, detailing the steps they have taken to prevent and reduce the risk of forced or child labour in their supply chains.
- The first report was due on May 31, 2024.
- Reports must be approved by the company’s board of directors.
- Reports must be publicly accessible on your company’s website.
2. Supply Chain Due Diligence
Businesses must evaluate their supply chains to ensure they do not involve forced or child labour.
- Supplier Audits: Conduct risk assessments and vet suppliers to confirm compliance.
- Contractual Safeguards: Include clauses in supplier agreements that prohibit forced and child labour.
- Internal Training: Educate employees and procurement teams on forced labour risks and compliance measures.
3. Accountability for U.S. Importers & Exporters
U.S. companies selling in Canada must ensure that all suppliers and manufacturing partners follow Bill S-211’s compliance requirements.
- Obtain certifications from suppliers confirming that no forced or child labour is used in production.
- Require detailed supply chain documentation and conduct spot-check audits.
- If high-risk labour practices are found, develop a corrective action plan or seek alternative suppliers.
Consequences for Non-Compliance
Failing to comply with Bill S-211 can lead to severe financial, legal, and reputational consequences.
Financial Penalties: Up to $250,000 CAD Per Violation
Companies that fail to file their annual report or provide false/misleading information face fines of up to $250,000 CAD per violation.
Executive & Director Liability
Corporate executives and board members can be held personally liable for non-compliance, meaning that failure to file a report could result in direct legal action against company leadership.
Market Access & Business Risks
Non-compliance can lead to:
- Loss of business contracts with Canadian distributors and retailers.
- Exclusion from Canadian government procurement opportunities.
- Reputational damage if your company is exposed for failing to address forced labour risks.
For U.S. companies that rely on Canadian partnerships, non-compliance could mean losing access to the market entirely.
Steps U.S. Companies Should Take Now
1. Determine If Your Business is Covered by Bill S-211
If your U.S. business exports, manufactures, or distributes goods in Canada, assess whether the law applies to you based on your revenue, assets, and employee count.
2. Conduct a Full Supply Chain Audit
- Identify high-risk suppliers operating in regions with forced labour concerns.
- Require third-party certifications and supplier audits to ensure compliance.
- Implement contractual safeguards that prohibit forced and child labour.
3. Prepare & Submit Your First Compliance Report
- Collect data on supplier compliance measures.
- Ensure board of directors’ approval before submission.
- Publish the report on your website before May 31 each year.
4. Develop an Ongoing Compliance Strategy
- Train procurement teams on ethical sourcing and forced labour risks.
- Implement continuous monitoring & corrective actions for supply chain risks.
- Stay updated on Canadian regulatory changes to ensure long-term compliance.
Final Takeaway: U.S. Companies Cannot Ignore Bill S-211
For any company producing, selling, or distributing goods in Canada—including U.S. businesses exporting to Canadian retailers—compliance with Bill S-211 is now mandatory.
Failure to comply can result in heavy fines, liability for executives, and restricted access to the Canadian market.
By taking proactive steps—such as auditing suppliers, implementing compliance policies, and submitting annual reports—U.S. companies can maintain their presence in Canada while avoiding penalties.
Need Help Navigating Bill S-211 Compliance?
At Juris Law Group, we specialize in cross-border compliance and can help your U.S. business:
Conduct supply chain audits to identify risks. Draft compliance policies and supplier agreements. Prepare and submit your required annual compliance report.
Contact us today to ensure your business stays compliant with Canada’s Bill S-211.
