Modern slavery enforcement is on the horizon

As we enter the final quarter of 2025, the landscape of federal reporting, compliance, and enforcement under the Canadian Supply Chains Act (SCA) is rapidly evolving. For businesses operating in Canada or trading across international borders, these changes signal a critical moment for responsible supply chain management. Below, we unpack several key developments and discuss what they mean for clients navigating these new regulatory realities.

Since August, the Canadian Border Services Agency (CBSA) has ramped up its efforts to combat forced labor in supply chains. Notices have been sent to various companies in numerous industries whose imported goods—ranging from fish and leather products to apparel, electronics, and toys—are identified as carrying elevated risks of forced labor. The message is clear: companies must proactively review their supply chains to ensure compliance with the Customs Tariff, which bans the import of goods produced wholly or in part by forced labor.

For many organizations, future shipments suspected of involving forced labor could face severe consequences, including seizure by CBSA or other enforcement actions under Canadian customs laws. This is not just a procedural warning; it represents a real operational, financial and reputational risk. Companies should urgently assess their due diligence processes and documentation to avoid disruptions, penalties, and public scrutiny.

In an effort to ease administrative burdens, Public Safety Canada (PSC) has released an optional reporting template for organizations with supply chain reporting obligations in the UK, Australia, and Canada. Developed with input from UK and Australian authorities, this template organizes requirements into seven clear themes. Importantly, it encourages organizations to adopt a "continuous improvement" approach—meaning your compliance statements should demonstrate progress and increasing sophistication over time.

Where appropriate, leveraging the template can simplify reporting; however, regulators expect companies to show evolving practices and deeper understanding year after year. Staying stagnant is not an option; ongoing education, process enhancement, and transparent disclosures will be key to meeting stakeholder and regulatory expectations.

In late September, PSC issued a Request for Proposal (RFP) seeking consulting support for implementing Canada's supply chain transparency regime. The RFP focuses on analyzing annual SCA reports, developing assessment frameworks, benchmarking performance, and offering guidance on responsible business practices.

This request for consulting support signals the government's commitment to robust enforcement and the likelihood of more rigorous reviews of submitted reports. Companies should anticipate that their compliance efforts may be scrutinized not only for legal sufficiency but also for best practices and industry benchmarks. Getting ahead of these expectations by investing in ethical supply chain expertise and transparent reporting will help mitigate risks and position your business as a leader in responsible sourcing.

• Assess and document your supply chain due diligence. Proactively identify and address risks of forced labor, especially in high-risk categories flagged by CBSA.
• Leverage the new reporting template. Use it to streamline disclosures and plan for year-over-year improvements, if appropriate for your organization.
• Monitor regulatory developments. Stay updated on PSC's evolving guidance and audit frameworks to ensure ongoing compliance.
• Seek expert support. Consider consulting with legal counsel and supply chain and compliance professionals to strengthen your practices and prepare for heightened enforcement.

Ultimately, these developments are a wake-up call for all organizations with international supply chains. Proactive compliance and continuous improvement are now essential to avoid disruption, protect your reputation, and align with emerging regulatory expectations.