Overview
May 31, 2026, will mark the third annual reporting deadline for organizations covered by the Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Act”).
As discussed in our previous insights, “A Practical Guide to Supply Chain Transparency,” Public Safety Canada (the “PSC”) has issued various updates to its guidelines regarding who is covered by the Act and the requirements for supply chain transparency reporting. This article covers the pertinent updates organizations need to be aware of prior to the May 31, 2026, reporting deadline.
Further Guidance from Public Safety Canada
Who Has Reporting Obligations Under the Act?
Since our last update, “Supply Chain Reporting in 2025,” the PSC has issued further guidance around when an organization must report as well as directions on how to report.
As a reminder, there is a two-step process to determining whether an organization is covered by the Act:
First Step
Whether the organization is an “Entity” as defined in the Act, meaning:
- It is either
- Listed on a stock exchange in Canada; or
- Has a place of business, does business, or has assets in Canada,
- And meets two of the following criteria in at least one of their two most recent financial years:
- Has at least $20 million in assets,
- Has generated at least $40 million in revenue, and
- Employs on average at least 250 employees.
Second Step
Once an organization qualifies as an “Entity” under the Act, they will have a reporting obligation under the Act only if it:
- Produces goods in Canada or elsewhere;
- Imports goods produced outside Canada; or
- Controls another Entity that produces or imports goods.
In our last update, we outlined the PSC’s guidance around the meaning of “place of business” and “importing,” as those terms relate to identifying an “Entity” under the Act. Since then, the PSC has provided further clarity, particularly around when an Entity has reporting obligations under the Act.
For example, in our last update, we noted that the PSC stated that businesses engaged in only minor importing, distributing, or production activities would not be captured under the Second Step. One of the changes the PSC has made to its guidance is to clarify that “very minor dealings” means incidental, low in volume, or not central to the organization’s core business.
Further, and importantly, the PSC has defined “control” to include direct and indirect control which extends down an Entity’s organization change. To assess whether an Entity “controls” another Entity that engages in the production or importation of goods, an Entity can rely on its accounting standards, although the definition of control extends beyond those standards and should be interpreted broadly. The PSC’s guidance also refers to the definition of control set out by the Office of the Superintendent of Financial Institutions which is broad and captures legal and factual control.
Notably, Entities only need to report on the activities of subsidiaries that are also considered Entities under the Act.
While these are minor updates that may not change whether certain organizations who have been reporting the past two years are covered or not, the updates signify that the PSC is cognizant of organizations’ confusion concerning certain terms used in the Act and that it is working to address that confusion by providing further information.
Other Notable Updates
Other notable updates include:
- Providing an optional template for organizations with reporting obligations in Canada, the United Kingdom, and Australia;
- Confirming that Entities can submit a revised version of their report within one year of the applicable reporting deadline if new information becomes available;
- Offering suggestions regarding additional but optional content an Entity can include in their yearly reporting; and
- Clarifying that a report will not be accepted without a proper attestation.
The 2025 Annual Report to Parliament
As in 2024, the PSC has published its annual report to Parliament summarizing the data collected from the reports submitted in that year (the “2025 Report”).
The 2025 Report confirms that in 2025, the PSC refocused its efforts on refining the report intake process and issuing further guidance to support those Entities who have to report under the Act.
In line with this, the PSC received a total of 4,313 reports by May 31, 2025, a decrease from the number of reports received in 2024, which was 5,795. This is likely because the PSC’s guidance on who is captured under the Act assisted Entities in identifying that they did not have reporting obligations.
Despite the lower number of reports, the 2025 Report states that there was an increase in organizations who identified risks in their supply chains. Risks of forced labour and child labour were generally found in the sourcing of raw materials and commodities. The most common form Entities have taken to combat forced labour and child labour in supply chains was to embed responsible business conduct into the organization’s policies and management systems.
Importantly, as in 2024, no orders or charges were made under the Act in 2025.
Takeaways
As the deadline approaches, organizations should start thinking about what information they will be including in their supply chain transparency reports. As the 2025 Report demonstrates, many organizations have focused on bolstering their policies and ensuring that responsible and ethical practices are being embedded therein.
Organizations should contact their regular lawyer at the firm for further information on developing these policies and filling out a report based on additional information identified in the PSC’s updated guidance.
Need More Information?
For more information or assistance with supply chain reporting, contact Rebecca Rosenberg at rrosenberg@filionlaw.com, or your regular lawyer at the firm.