What CPAs Need to Know About the Fight Against Forced Labour and Child Labour in Supply Chains Act (Bill S-211)

September 2025

Modern slavery is a global human rights issue affecting more than 50 million people globally. Unlike historical slavery, its modern form is often hidden in plain sight, woven into the fabric of supply chains, manufacturing, agriculture and domestic work.

Canada joined the global movement to combat modern slavery when Bill S-211 Fighting Against Forced Labour and Child Labour in Supply Chains Act came into force January 1, 2024. It requires entities listed on a Canadian stock exchange, those with a place of business, doing business, or holding assets in Canada, and meeting certain thresholds (e.g. $20 million in tangible assets), to annually report on measures taken to prevent the use of forced and child labour in their supply chains. These reports must be submitted to the federal government and published in a prominent place on the entity’s website, ensuring transparency and public accountability.

However, addressing modern slavery in an entity’s supply chain goes beyond meeting compliance requirements. It is a critical component of sound enterprise risk management. Here’s why:

Reputational Risks

Awareness of modern slavery is rising, and public sentiment is increasingly unforgiving toward companies linked to unethical labour practices. Reports filed under Bill S-211 are made publicly available by the Minster of Public Safety, allowing consumers, investors, activists and media to scrutinize reported practices. Businesses that have forced or child labour in their supply chain could face reputational damage.

Global Trade Risk

Canada’s Bill S-211 aligns with a growing international movement to eliminate forced and child labour from global supply chains. Similar legislation exists in jurisdictions such as the United Kingdom, Australia, the European Union and California. These laws reflect a shared expectation that businesses must take responsibility for human rights across all levels of their operations. Failure to meet these expectations can expose companies to significant global trade risks, including import restrictions, disrupted market access, and strained relationships with international partners.

Under the United States-Mexico-Canada Agreement (USMCA), ethical sourcing is a prerequisite. The agreement includes provisions that prohibit the importation of goods produced using forced labour. The U.S. Customs and Border Protection (CBP) has actively detained shipments suspected of violating these rules, particularly in industries such as electronics, textiles and industrial materials. Non-compliance can result in import bans and financial penalties.

Loss of contracts with buyers

Failure to demonstrate robust due diligence under laws like Bill S-211 can result in termination of contracts, exclusion from bidding processes or removal from preferred vendor lists. For example, the Government of Canada’s procurement policy now includes clauses that allow contracts to be cancelled if goods are found to be produced using forced labour.

Implications for Small and Medium-Sized Businesses

Small and medium-sized businesses (SMEs) may be indirectly impacted by Bill S-211 especially those engaged in producing, selling, distributing or importing goods to larger clients that must comply with Bill S-211 or similar global legislation. SMEs may be asked to provide supply chain data or adopt stricter labour standards to support those clients’ reporting obligations. Not meeting such requirements may expose SMEs to risk.

Key Steps to Manage Modern Slavery Risks in Supply Chains

CPAs can guide their organizations or clients in complying with Bill S-211. Below are key steps to effectively manage supply chain risks associated with forced and child labour:

1. Develop and Communicate Ethical Policies
   • Establish clear human rights and ethical sourcing policies that align with Bill S-211 and international standards, such as the United Nations Guiding Principles on Business and Human Rights (UNGPs).
   • Integrate these policies into existing procurement frameworks to ensure consistency and enforceability.
   • Create a supplier code of conduct outlining expectations around labour practices and require suppliers to formally acknowledge and sign off on these standards.
   • Ensure these policies are communicated across the organization, for example, through employee training sessions and to suppliers.
2. Conduct Supply Chain Risk Mapping
   • Identify high-risk regions, industries and suppliers by leveraging publicly available resources from non-government organizations, such as the Walk Free Global Slavery Index, that highlight sectors with elevated risks – particularly textiles, agriculture, mining and electronics.
   • Consider going beyond tier 1 or direct suppliers, such as the supplier’s suppliers or their subcontractors.
   • Use tools like supplier questionnaires, audits and third-party assessments to evaluate your organization’s exposure.
3. Implement Due Diligence Processes
   • Integrate forced and child labour risk assessments into procurement and vendor selection.
   • Require suppliers to certify compliance with labour standards.
4. Monitor and Evaluate Supplier Practices
   • Conduct regular audits and site visits.
   • Use performance metrics to tract supplier adherence to ethical standards.
   • Leverage supplier monitor platforms, such as Sedex, EcoVadis or SupplyShift to streamline data collection, assess risk and benchmark supplier performance.
5. Report Transparently
   • Prepare and publish annual reports as required under Bill S-211 (if applicable).
   • Include detailed disclosures on policies, identified risks, mitigation actions and effectiveness.

Beyond Risk: Ethical Sourcing as Opportunity

Addressing modern slavery isn’t just about risk, it also presents a strategic opportunity for business. CPAs can help shift the narrative from compliance to opportunity, positioning ethical sourcing as a strategic advantage that strengthens brand trust, attracts value driven stakeholders and consumers, and unlocks long-term value.

Conclusion

In today’s global marketplace, compliance with human rights standards is not just a legal obligation – it’s a strategic and moral imperative. For Canadian businesses of all sizes, aligning with ethical sourcing practices is essential to maintaining access to international markets and safeguarding reputational value. Those who lead with transparency and integrity in their supply chains can mitigate risk and position themselves for an evolving trade landscape.