Bill S-211, Fighting Against Forced Labour and Child Labour in Supply Chains Act
Canadian organizations, including certain large charities and not-for-profits, may soon be required to file public reports on their efforts to prevent and reduce the risk of forced labour and child labour in their supply chains. Bill S-211, Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Act”), which sets out the requisite reporting obligations, received Royal Assent on May 11, 2023, and will come into force on January 1, 2024.
Reporting obligations will apply to “entities,” which are defined in section 2 of the Act as:
a corporation or a trust, partnership or other unincorporated organization that
- is listed on a stock exchange in Canada
- has a place of business in Canada, does business in Canada or has assets in Canada and that, based on its consolidated financial statements, meets at least two of the following conditions for at least one of its two most recent financial years:
- it has at least $20 million in assets,
- it has generated at least $40 million in revenue, and
- it employs an average of at least 250 employees; or
- is prescribed by regulations [emphasis added].
The Act does not set out what a “business” is under paragraph (b) of the definition for an “entity,” and regulations have not yet been published.
Once the Act is in force, entities that meet the above criteria and that produce, sell or distribute goods in Canada or elsewhere; import into Canada goods produced outside of the country; or control an entity engaged in these activities, will be required to report on the “steps the entity has taken during its previous financial year to prevent and reduce the risk that forced labour or child labour is used at any step of the production of goods in Canada or elsewhere by the entity or of goods imported into Canada by the entity.” Reports will also need to include the following information:
- [the entity’s] structure, activities and supply chains;
- its policies and its due diligence processes in relation to forced labour and child labour;
- the parts of its business and supply chains that carry a risk of forced labour or child labour being used and the steps it has 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;
- the training provided to employees on forced labour and child labour; and
- how the entity assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains.
Reports must be filed with the Minister of Public Safety and Emergency Preparedness by May 31 of each year, commencing on May 31, 2024, and entities must make the report available to the public, including by “publishing it in a prominent place on its website.”
The Act does not contain any exemptions for charities or not-for-profits, and therefore will apply to such organizations, provided that they fall with the Act’s definition of “entity.” However, given the criteria set out in the definition, the Act will only apply to a few large charities and not-for-profits.
Ontario Bill 91, Less Red Tape, Stronger Economy Act, 2023
Ontario’s omnibus Bill 91, Less Red Tape, Stronger Economy Act, 2023 is in its third reading at the Legislative Assembly as of May 30, 2023. As reported in the April 2023 Charity & NFP Law Update, Bill 91 proposes amendments to section 27.2 of the Trustee Act to clarify that delegated investment managers will be permitted to invest in mutual funds, pooled funds and segregated funds under variable insurance contracts.
Further, as reported in the April 2023 Charity & NFP Law Update, the Bill also proposes amendments to the Not-for-Profit Corporations Act, 2010 and the Corporations Act, among other statutes, to generally facilitate certain virtual processes by replacing, in part, the temporary legislative framework for virtual processes (including virtual meetings), which was enacted in response to the COVID-19 pandemic, and which is set to expire on September 30, 2023. In this regard, corporations would be able to hold virtual or hybrid meetings, and voting could be conducted virtually or in hybrid form, unless the corporation’s governing documents provide otherwise. Bill 91 would also better facilitate the sending of notices or other documents by electronic means, and would permit affected corporations, businesses, and partnerships to store records electronically and facilitate the electronic examination of records remotely.
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Terrance S. Carter is managing partner and Adriel N. Clayton is an associate with Carters.