Under the law, organizations must assess their supply chains and report the actions they take to prevent or mitigate the risk of forced labour and child labour.

Some businesses are struggling with entity scoping and report filing procedures, says Harrison. Entity scoping confusion includes understanding how to assess the applicable financial thresholds and evaluating what constitutes an asset and what is a Canadian asset when determining whether the act applies.

Initially, Harrison says, some clients were unsure of the “business activity concepts” that would attract reporting obligations. These are: “production, manufacturing, growing, extracting, processing, sale or distribution of goods” and “importation of goods into Canada.”

Harrison says the act does not have a de minimis concept, so any level of business activity fitting those broad categories would put an entity under the act’s scope. She says there was confusion around the concept of “importing,” for example. Businesses were unsure whether importing a small amount of product – for example, office supplies for its employees – would bring an entity under the act’s scope. Public Safety Canada tried to address the issue by indicating that “minor engagement” in listed activities would not necessarily be enough to create a reporting obligation.

The concepts of “selling” and “distributing” have also ignited discussions in the market, says Harrison. Some have questioned whether a foreign supplier selling online to a Canadian would count as “doing business in Canada” and fall under the Canadian reporting obligation. Recently released updated guidance eliminates reference to “distribution and selling” and focuses on importation and production. She says this change suggests Public Safety Canada may not use these concepts alone as reporting grounds, despite their explicit reference in the activities listed in s. 9 of the act.