Forced Labour Prohibition

Canada now requires federal suppliers to prove their goods aren't produced using forced labour—and the consequences for non-compliance include contract termination. This isn't just about ethics anymore. It's enforceable policy backed by legislation, import prohibitions, and contractual clauses that give departments real teeth.

How It Works

The framework rolled out in stages. First came the Customs Tariff prohibition on July 1, 2020, which banned the importation of goods produced using forced labour under tariff item No. 9897.00.00. Then PSPC started embedding anti-forced labour clauses into contracts in November 2021. As of November 20, 2023, these clauses became mandatory in all Standing Offers and Supply Arrangements for goods and services. According to Supply Manual Notification 150, departments can now terminate contracts where credible evidence exists that goods or services were produced, wholly or partially, using forced labour or human trafficking.

The Fighting Against Forced Labour and Child Labour in Supply Chains Act came into force on January 1, 2024, adding another layer. Government institutions that produce, purchase, or distribute goods must now submit annual reports by May 31 detailing steps taken to prevent forced labour in their supply chains. This applies across federal procurement, from DND equipment purchases to SSC technology contracts. The Code of Conduct for Procurement explicitly requires vendors and their subcontractors to comply with Canada's import prohibition—making this a binding obligation throughout the contractor hierarchy.

In practice? Procurement officers need to conduct due diligence before awarding contracts and maintain oversight throughout performance. If Public Safety Canada flags concerns about goods in your supply chain, or if the Canada Border Services Agency stops a shipment, your contract is at risk. The reporting requirements also mean institutions must track and document their prevention efforts annually, creating an audit trail that connects procurement decisions to human rights compliance.

Key Considerations

• Termination rights are discretionary but real: PSPC can terminate contracts based on "credible evidence"—not just convictions. The bar is lower than many suppliers expect, particularly when dealing with high-risk sourcing regions or industries.

• Subcontractors matter: Your prime contractor's compliance isn't enough. The Code of Conduct for Procurement extends the prohibition through the entire supply chain. You need visibility into second and third-tier suppliers.

• Annual reporting creates compliance records: Government institutions must document their prevention measures every year. This isn't passive recordkeeping—it's evidence that can support or undermine contract decisions if forced labour concerns arise.

• The prohibition predates recent legislation: Some suppliers think this started in 2024. It didn't. The import ban has been active since 2020 and contractual clauses since 2021. If you haven't updated your vendor performance monitoring, you're already behind.

Related Terms

Code of Conduct for Procurement: The ethical framework that includes forced labour compliance requirements for vendors. Supply Arrangement: Contracting vehicles that now incorporate mandatory anti-forced labour clauses. Contract Security Program: Another compliance layer that intersects with supply chain integrity.

Sources

• Supply Manual Notification 150 - Anti-forced Labour Requirements

• Fighting Against Forced Labour and Child Labour in Supply Chains Act

• Forced Labour in Canadian Supply Chains (Public Safety Canada)

The enforcement mechanisms are already in place and actively used. Make sure your supply chain documentation can withstand scrutiny before credible evidence becomes a contract termination.