Bill S-211 poised to catch construction with its guard down

Mandatory child labour and anti-slavery reporting requirements are coming to Canadian companies with Bill S-211 , ready or not.

Federal Bill S-211 came into force on Jan. 1, 2024, but the deadline for the first required report is May 31, only a few weeks away. Time is short for those qualifying under the legislation.

S-211 acts as encouragement for companies to enhance the “S” (Social) in their ESG policies. By improving labour source disclosure, it attempts to ensure supply lines into Canada for all sorts of goods available for distribution here are free from forced labour of any sort. It follows the path of similar anti-slavery and child labour legislation already in force in Australia, the United Kingdom and the state of California.

The construction industry is specifically named as an activity covered under the legislation. However, only the largest parties on the construction pyramid may need to report.

Bill S-211 qualifies by size those entities required to report: assets greater than $20 million; annual turnover of over $40 million; and over 250 employees on average. That takes in a number of large and mid-sized contractors, subcontractors and project partners.

There are further qualifications to the legislation based on the type of business activity.

Companies that fall within reporting range are those that sell, produce or distribute goods in Canada or outside Canada, import goods made outside of Canada, or control any entity that partakes in any of the above activities. That’s a pretty wide swath when it comes to construction.

For those who find themselves captured by these definitions, the government is there to help.

The Ministry of Public Safety has developed a website outlining the detailed reporting steps that need to be taken. Publication of any required report must be posted on the company’s website. If there is no website, the report must be readily available to the public in some other form.

Key to the reporting process is the ministry’s questionnaire. Some responses are mandatory and must address specific concerns as appropriate to the business being carried on.

Here are samples of what the government wants disclosed.

“What steps has the entity taken in the 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?”

Several possible steps are suggested. All that apply must be described.

“Does the entity currently have policies and due diligence processes in place related to forced labour and/or child labour?”

A “Yes” or “No” answer is sufficient. If Yes, these policies must be described under several specific guidelines provided.

“Has the entity identified parts of its activities and supply chains that carry a risk of forced labour or child labour being used?”

A Yes or No will do. If Yes, further detail must be provided.

There are 18 questions of this sort in total, many covering similar areas of concern in different contexts.

Issues cannot be passed off by referencing a higher-level supplier’s disclosure report, Sahil Shoor, partner with Gowling WLG, told the Daily Commercial News.

“The company must take steps independently if it satisfies the underlying criteria.”

“The report must be approved by the entity’s governing body,” the ministry says, and submitted in pdf format.

The reporting requirements result in as many questions as the website attempts to address. Shoor suggests construction industry players consult with their legal advisers, accountants or in-house compliance departments regarding how to correctly meet the bill’s requirements.

Once the required report is filed, it is not immediately clear which ministry, government department or agency will review it or enforce the assurances outlined.

However, forewarned is forearmed, and the concluding sentence on the questionnaire page advises that reporting entities should, “assume that the information is subject to verification at any time.”

Furthermore, organizations, including officers and directors, may be liable for a fine of up to $250,000 per offence for failing to report or providing false or misleading information.