Canadian publicly-traded companies and government agencies may soon be required to provide annual reports outlining their efforts to combat the use of forced labor and child labor within the production cycle of goods made or imported into Canada. This comes after Federal Senate Bill S-211 recently passed its third reading in the Canadian House of Commons, meaning it is “widely expected to become law in its current form” according to Mondaq.
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If Bill S-211 receives Royal Assent (a practice where a monarch or governmental leader formally approves a law) in 2023, the first annual public reports will be due in May 2024. Those reports will need to describe the actions currently being taken by businesses and governmental bodies to address child and forced labor risks during the 2023 fiscal year.
If passed, any organization that fails to comply with the bill will be subject to fines of up to $250,000, and leaders from these organizations could face personal liability.
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“Overall, the legislative intention is to force suppliers upstream to quickly realize that using these forms of labor will prevent them from reaching the Canadian market,” writes Mujir A. Muneeruddin, partner at law firm Pallett Valo LLP.
Beyond government entities and businesses listed on Canadian stock exchanges, organizations that produce goods in Canada, sell goods in Canada, distribute goods in Canada, import goods into Canada, or companies that control an entity that produces, sells, distributes or imports goods into Canada will be required to comply with the law if passed.
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