From Reporting to Enforcement: What Bill C-35 Means for Canadian Supply Chains
Canadian contractors increasingly rely on materials, equipment and manufactured components sourced through global supply chains. The government has proposed a bill designed to strengthen efforts to prevent goods produced through forced labour from entering the Canadian market. The bill is intended to address serious human rights concerns, which should be of concern to all. However, it could also have practical implications for contractors and subcontractors by increasing the operational and financial risks associated with importing goods.
Bill C-35, An Act Respecting the Prohibition of the Importation of Goods Produced by Forced Labour is currently at second reading in the House of Commons and has not yet come into force.
How Bill C-35 Builds on Existing Legislation
Since 2024, the Fighting Against Forced Labour and Child Labour in Supply Chains Act (Bill S-211) has required certain entities and federal institutions to report annually on the steps they have taken to prevent or reduce the risk of forced labour and child labour within their supply chains. Bill C-35 would shift Canada's approach from reporting to active enforcement.
The Bill was introduced largely in response to the Office of the U.S. Trade Representative's Section 301 Investigations Report, which criticized Canada's limited enforcement of its existing prohibition on importing goods produced by forced labour.
If enacted, Bill C-35 would authorize the Minister of Foreign Affairs to establish a list of goods reasonably suspected of being produced using forced labour. Goods reflected on that list are prohibited from being imported. It would also authorize customs officers to determine whether imported goods were produced wholly or in part by forced labour.
Where a customs officer suspects imported goods were produced using forced labour, the goods may be detained for up to 90 days while their origin is investigated. Bill C-35 also provides that the owner of the detained goods at the time of importation is responsible for costs associated with detention, storage, transportation and disposal.
Practical Implications for the Construction Industry
Construction projects depend on imported materials, equipment and manufactured components sourced through international supply chains. If Bill C-35 is enacted, imported goods suspected of having been produced using forced labour could be detained at the border, potentially affecting procurement timelines, project schedules and costs.
These proposed enforcement measures could also affect how contractual risk is allocated for imported goods. Parties negotiating contracts involving cross-border procurement may wish to carefully consider the use of INCOTERMS and other contractual provisions addressing responsibility for border delays, detention costs and supply chain disruptions.
Prepare Now Before Bill C-35 Comes Into Force
Contractors and subcontractors that rely on imported goods should conduct appropriate supply chain due diligence by identifying higher-risk suppliers and reviewing their procurement practices. Procurement documents and construction contracts may also need to be updated to include supplier disclosure obligations, compliance certifications and contractual protections addressing the risk of materials produced using forced labour.
From an operational perspective, early procurement and confirmed lead times will become increasingly important. Contractors should review project schedules and procurement timelines to ensure sufficient flexibility to accommodate possible border inspections or the detention of imported goods.
The Bottom Line
Bill C-35 would mark a shift from reporting obligations to active enforcement. For contractors and subcontractors, understanding where materials originate, conducting appropriate supply chain due diligence and ensuring contracts appropriately allocate procurement risks will help reduce the potential impact of border detentions and related project delays if the legislation comes into force.
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