Deadline for Forced and Child Labour Reports is Fast Approaching

• Austin
  Leask

  Austin
  Leask

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It’s that time of year when the days are getting longer, and the weather is getting warmer. With spring’s arrival also comes the annual deadline for certain government institutions, non-government organizations and corporations to submit their reports detailing the steps they’ve taken to combat forced and child labour in their supply lines. Reports are due May 31^st of each year for entities that are required to report under Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Act”).[1]  

Last year, our firm published an overview of the Act in preparation for the first reporting year. That overview can be found here, and it is a handy refresher on the Act’s goals and how to approach a report.  

The first year of reporting under the Act came with growing pains as entities and government institutions navigated the reporting process for the first time. Public Safety Canada has published additional guidance to address common questions about the interpretation of the Act (the “Updated Guidance”). This post looks at a curated selection of the Updated Guidance for entities and what happens if an entity fails to submit its report.  

Updated Guidance

The most important question an organization needs to answer is whether it is an entity under the Act and, if so, if it must make a report. The Updated Guidance clarifies the definition of an entity and narrows the type of conduct that triggers the obligation to report.

Who is an Entity?

The Act defines an entity as a corporation, trust, partnership, or other unincorporated organization that is either:

1. listed on a stock exchange in Canada;
2. has a place of business in Canada, does business in Canada, or has assets in Canada and that meets at least two of the following conditions for at least one of its two most recent financial years:
   1. it has at least $20 million in assets,
   2. it generates at least $40 million in revenue, and
   3. it employs an average of at least 250 employees; or
3. is prescribed by the regulations.[2]

Questions arose regarding some of the descriptors used in this definition. Public Safety Canada’s Updated Guidance has clarified the following:  

1. Doing business in Canada can be determined using the same factors used by the Canada Revenue Agency for determining if a person is carrying on business in Canada for GST/HST purposes.
2. Having assets in Canada refers to property in Canada that is tangible. This excludes things like copyrights, trademarks, and securities.
3. Employee means anyone employed by the entity on a full-time, part-time, or temporary basis anywhere in the world.[3] 

The Updated Guidance will impact which organizations qualify as an entity and may therefore be required to report under the Act. You can review the complete updated guidance on Public Safety Canada’s website.

Who must submit a Report?

If — under the Act, with reference to the Updated Guidance — your organization is an entity, the next step is to determine if the entity’s activities require it to file a report. Under the Updated Guidance, the obligation to report is triggered if an entity:

1. Produces goods in Canada or elsewhere;
2. Imports goods produced outside Canada; or
3. Controls another entity that produces or imports goods.[4]

These new guidelines are narrower than what is actually stated in the Act, which has not as of yet been amended to reflect the Updated Guidance. Entities who solely distribute or sell goods are, based on the Updated Guidance, no longer required to report despite being listed in the Act[5] and Public Safety Canada has stated they will not seek enforcement action on those entities for failure to file.[6] 

What happens if a report is not submitted?

If an entity must submit a report and it fails to do so, it faces a significant penalty. Under the Act, a person or entity who fails to submit a report is guilty of a summary offence carrying a fine of up to $250,000.[7]  Directors, officers, and agents may also be personally liable if an entity fails to submit a report, even if the entity itself has not been prosecuted or convicted.[8]

While no sanctions were given in the last reporting cycle, it is unknown if this leniency will continue moving forward.[9]

What happens if a report is submitted late?

Last year over 6000 reports were submitted late. [10]  While Public Safety Canada continued to accept these reports for the sake of transparency, under the Act there is no leniency or grace period for reports that miss the May 31^st deadline. A strict reading of the Act would treat a late report the same as an unsubmitted report. As such, to avoid the risk of penalties, entities should leave enough time to draft, edit, and approve a report before the May 31^st deadline.

Take-Aways

In preparing your report for the year you will want to review the Updated Guidelines to determine:

1. if your organization is an entity under the Act; and
2. if it is an entity, if it must submit a report.

With the unknowns about enforcement and late submissions, it is important to budget enough time for the report to be completed, approved, and submitted before May 31^st.

Navigating these Updated Guidelines and the Act can be challenging. If your organization has questions related to the reporting requirements under the Act or the Public Safety Canada guidance please reach out to our Business Advice and Transactions Team and we would be happy to assist.

[1] Fighting Against Forced Labour and Child Labour in Supply Chains Act, SC 2023, c 9, s 11,

[2] Ibid at s 2,

[3] Public Safety Canada “Guidance for entities” (November 15, 2024) www.publicsafety.gc.ca/cnt/cntrng-crm/frcd-lbr-cndn-spply-chns/prpr-rprt-en.aspx (accessed March 2025).   

[4] Ibid.

[5] Ibid.

[6] Ibid.

[7] Supra note 1 at s 19(1).  

[8] Ibid at s 20.

[9] Public Safety Canada “2024 Annual Report to Parliament on the Fighting Against Forced Labour and Child Labour in Supply Chains Act” (February 19, 2025) www.publicsafety.gc.ca/cnt/rsrcs/pblctns/2024-frcd-lbr-spply-chns-prlmnt/index-en.aspx (accessed March 2025).

[10] Ibid.

_{This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.}