Forced Labour and Child Labour in Canadian Supply Chains: Annual Report, 2025–26

Introduction

Senate Public Bill S-211, to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff., came into force on January 1, 2024

This Act requires that the head of every government institution whose activities include producing, purchasing or distributing goods in Canada or elsewhere submit an annual report to the Minister of Public Safety and Emergency Preparedness on or before May 31 of each year.

This report focuses on the steps taken by the National Research Council Canada (NRC) to prevent or reduce the risk that forced labour or child labour is used at any step in the production of goods purchased from the date the Act came into force until the end of the last fiscal year.

Structure, activities and supply chains

The NRC is an agency of the Government of Canada, and its mandate is set out in the National Research Council Act.

Responsibilities of the NRC under the Act:

Undertaking, assisting or promoting scientific and industrial research in fields of importance to Canada
Providing vital scientific and technological services to the research and industrial communities
Investigating standards and methods of measurement
Working on the standardization and certification of scientific and technical apparatus, instruments and materials used or usable by Canadian industry
Operating and administering any astronomical observatories established or maintained by the Government of Canada
Establishing, operating and maintaining a national science library
Publishing and selling or otherwise distributing such scientific and technical information as the NRC deems necessary

The NRC is the largest performer of research and technology development in Canada. Over 4,000 people across Canada are employed by the NRC. In addition, the NRC also employs guest workers from universities, companies and public and private-sector organizations.

Procurement activities and supply chains

The NRC's budgetary allotment for fiscal year 2025-26 is $2 billion. This spending comprises grants and contributions ($816 million), personnel ($625 million), other operating costs ($249 million) and capital ($300 million).

In 2025-26, the NRC awarded a total of $538 million on contracts and amendments for goods, services and construction. Of that amount, $250.7 million was for goods only, purchased through 3,771 contracts (purchase orders, contracts, call-ups against standing offers and supply arrangements).

During the reporting period, procurement activities covered several categories of goods, including aircraft and aircraft components, laboratory instruments, information technology equipment and software, chemical products, and vehicles. These main categories collectively accounted for close to 99% of the organization's total annual contract value.

The nature of these procurements—primarily technical, scientific and industrial goods—means they are generally sourced from suppliers operating in well-regulated markets. As a result, the overall exposure to risks related to forced and child labour within these supply chains is considered low.

In addition to the type of goods within these supply chains, the geographical profile of vendors further supports the organization's low exposure to forced and child labour risks. In 2025-2026, close to 99% of the total annual contract value was awarded to suppliers located in Canada, the United States, Germany, Japan and Switzerland.

These countries are recognized by international organizations for their strong regulatory frameworks and effective enforcement of labour standards, which contributes to a low-risk environment for unethical labour practices.

Policies and due diligence processes

Since November 2021, PSPC implemented anti-forced labour clauses in all goods contracts to ensure that it can terminate contracts where there is credible information that the goods have been produced in whole or in part by forced labour or victims of human trafficking. Additionally, since November 20, 2023, all PSPC standing offers and supply arrangements for goods that have been issued, amended or refreshed include anti-forced labour clauses.

As such, all of our contracts for goods resulting from the use of these tools include clauses relating to forced labour that set out, among other things, requirements for human rights and labour rights. These clauses can be found in policy notification 150, outlining anti-forced labour requirements.

Effective April 1, 2023, amendments to the Treasury Board Directive on the Management of Procurement require contracting authorities from all departments listed in schedules I, I.1 and II of the Financial Administration Act and commissions established in accordance with the Inquiries Act and designated as a department for the purposes of the Financial Administration Act to incorporate the Code of Conduct for Procurement (the Code) into their procurements.

Pursuant to the aforementioned amendments, the NRC has integrated the Code into our procurement processes, with a view to safeguarding federal procurement supply chains from forced labour and child labour. Contracts that our organization has awarded included the Code as part of the general conditions for goods.

The Code requires that vendors providing goods and services to the Government of Canada and their subcontractors comply with all applicable laws and regulations. In addition, the Code requires vendors and their subcontractors to comply with Canada's prohibition on the importation of goods produced, in whole or in part, by forced or compulsory labour. This includes forced or compulsory child labour and applies to all goods, regardless of their country of origin.

In October 2025, the NRC's procurement department began using the Contract Modernization Initiative (CMI). The CMI is an effort led by PSPC to modernize and streamline how federal contracts are developed, managed and issued. This new tool supports the integration of mandatory clauses, including those related to the code of conduct, into all solicitation and contract documents. In addition, solicitations now include an Offeror Declaration Form as an annex that requires bidders to formally acknowledge and agree to the terms of Code of Conduct for Procurement, reinforcing supplier accountability and ethical expectations prior to contract awarding.

As of May 31st 2024, the Ineligibility and Suspension Policy has been updated to set out when and how a supplier may be declared ineligible or suspended from doing business with the federal government. Among the events that could trigger the determination of ineligibility, the breach of the "Code of Conduct for Procurement" within the past 3 years is one of them.

As such, all of our contracts for goods with a transaction value of 10,000 dollars or more have been verified by our procurement officers through the Integrity database that is accessible via the PSPC website.

The prohibition on the importation of goods produced wholly or in part by forced labour came into force under the Customs Tariff on July 1, 2020. This amendment implemented a commitment in the chapter on labour of the Canada–United States–Mexico Agreement (CUSMA) and applies to all imports, regardless of origin.

Forced labour and child labour risks

On the basis of globally recognized sources such as the U.S. Department of Labor's List of Goods Produced by Child Labor or Forced Labor, the Global Slavery Index (Walk Free Foundation) and reports published by the International Labour Organization (ILO), certain types of goods and countries of origin are identified as having higher risks of exposure to forced and child labour.

Goods commonly associated with higher risks include those produced in labour‑intensive industries such as textiles, garments, footwear, electronics, agriculture, and mining. These sectors often rely on complex global supply chains where monitoring and enforcement of labour standards can be more challenging.

Similarly, elevated risks are observed in countries where governance, labour protections and enforcement mechanisms are weaker and where economic vulnerability or informal employment is more prevalent. These conditions can contribute to situations of exploitation, including forced and child labour.

Building on this global context, an analysis of the NRC's procurement data for the reporting period identified a limited proportion of goods that fall within categories recognized as having potential exposure to forced and child labour risks.

Two levels of risk were established for this analysis. The higher‑risk group includes goods such as textiles, leather, clothing, electrical and electronic products, and construction and building materials. The lower‑risk group includes categories such as furniture, fuels and lubricants, office supplies, and hardware and abrasives.

Contracts associated with these categories represented a total of approximately $2.7 million, accounting for 1.77% of all goods contracts awarded during the period. Of this amount, about $1.1 million was procured through the use of Public Services and Procurement Canada (PSPC) and Shared Services Canada (SSC) tools, including standing offers and supply arrangements.

An assessment of supplier countries of origin indicates that the NRC's exposure to high‑risk countries remains very low, both in contract volume and value. Out of a total of 3,771 contracts for goods, only 33 contracts—approximately 0.9%—were awarded to suppliers located in countries identified by international sources as having a higher risk of forced and child labour. These contracts represented just 0.08% of the total value of contracts awarded during the reporting period.

Of these 33 contracts, 32 were awarded to Chinese vendors and 1 to a vendor located in India. A deeper review of the Chinese suppliers revealed that the 32 contracts were distributed among 22 vendors, with 4 vendors located in Shenzhen and Zhengzhou, regions identified by global reports as having relatively higher exposure to forced labour risks.

To further assess potential concerns, an AI‑assisted review was performed to determine whether any of these vendors had been publicly associated with labour or human rights issues. The analysis found no evidence of such concerns among the vendors engaged by the NRC.

By leveraging tools such as the call-ups against PSPC standing offers and supply arrangements (6%), inclusion of the Code of Conduct for Procurement (85%) and integrity screening mechanisms (5%)—together representing a combined 96% of our procurement activities—we maintain strong safeguards across our supply chain. It is important to note that these categories are not mutually exclusive; contracts that incorporate the code of conduct general conditions are also subject to integrity verification, further reinforcing the robustness of NRC's procurement oversight.

We will continue to monitor risk, enhance due diligence practices, and engage suppliers to ensure alignment with ethical standards and the Government of Canada's commitment to human rights.

Remediation measures and remediation of loss of income

Given that the NRC has not identified the presence of any forced labour or child labour in its business or supply chain, it has not had to take measures to remediate any forced labour or child labour or to remediate any loss of income to vulnerable families.

Training

A total of 12.5% of the NRC procurement team has obtained their Supply Chain Management Professional (SCMP) designation or completed training related to ethical behaviour and social responsibility, which includes the absence of forced and child labour. In addition, all NRC procurement officers have received training on the use of the CMI tool introduced by PSPC. The mandatory use of this tool ensures that Code of Conduct for Procurement clauses are systematically integrated throughout the procurement process, reinforcing ethical standards from solicitation to contract award.

The NRC is aware that PSPC is developing awareness‑raising and guidance materials, including risk‑mitigation strategies, for suppliers in high‑risk sectors. While the CMI has already been implemented within NRC's procurement processes, we have not yet fully integrated additional PSPC guidance. As these materials become available, the NRC will draw on them to strengthen its ethical procurement practices as time and resources permit.

Assessing effectiveness

The NRC is committed to addressing the risks of forced labour and child labour in our business and supply chains. As indicated in this report, the NRC has measures in place to prevent and reduce these risks. However, to date, no actions have been taken to assess the effectiveness of these measures.

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