Canada’s Forced Labour Act Directly Impacts Garment Brands

Canada had enacted its own Forced Labour Act officially known as Bill S-211 in May 2023, which is set to come into effect from January 1, 2024 and directly impacts fashion garment and footwear brands.

Canada has enacted this law in a bid to align with the United States and harmonise obligations within the United States-Mexico-Canada Agreement (USMCA).

The law aims to foster a fair-trade environment among the three countries by enforcing ethical labour practices across all supply chains and industries, particularly the fashion industry procurement chain.

Under Bill S-211, every entity, including corporations, SMEs, government agencies, NGOs, and trade unions are required to submit an annual report to the Minister of Public Safety and Emergency Preparedness.

The report outlines the steps the entity has taken during its previous financial year to prevent and reduce the risk of forced labour or child labour being used at any stage of goods production.

This requirement extends to goods produced both domestically and abroad by the entity, as well as goods imported into Canada by the entity.

This report details measures taken against forced and child labour in goods production, purchase, or distribution.

It covers the institution’s structure, activities, supply chains, policies, risk assessment, remediation measures, employee training, and effectiveness assessment.

To ensure adherence to the Act, an official appointed by the Minister can conduct an inspection if there’s suspicion of non-compliance.

This official has the authority to scrutinise any document, computer system, or data at the business location.

In case of non-compliance, the Act imposes criminal penalties, which includes individual criminal liability for officers and directors of the company.

Furthermore, the company might be burdened with a substantial fine of up to $250,000 for various violations.

These include, failing to comply with reporting obligations, not publishing the report on the company’s website, deliberately providing false or misleading information, or refusing to cooperate.

Canada is expected to take further measures in the months ahead to curb the use and import of products produced by forced labour.