Fighting Against Forced Labour and Child Labour in Supply Chains Act: Communications Security Establishment Canada’s 2025 to 2026 annual report

The Fighting Against Forced Labour and Child Labour in Supply Chains Act (the Supply Chains Act) came into force on January 1, 2024.

The Supply Chains Act requires any government institution producing, purchasing, or distributing goods and services in Canada or elsewhere to submit a report to the Minister of Public Safety on or before May 31 of each year. It must detail the steps the government institution has taken during its previous financial year to prevent and reduce the risk that forced labour or child labour is used at any step of the production of goods produced, purchased, or distributed by the government institution.

The Supply Chains Act's reporting obligations also apply to entities producing goods in Canada or elsewhere, as well as those importing goods produced outside Canada. For definition, scope, and reporting requirements, please refer to the Supply Chains Act.

The report below is for the Communications Security Establishment Canada (CSE) fiscal year 2025-2026 (April 1, 2025, to March 31, 2026).

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Structure, activities and supply chains

CSE is a federal agency that procures goods and services both domestically and internationally to support its operational and technical mandates. It has incorporated the updated General Conditions for goods and services contracts and the Code of Conduct for Procurement ("the code") from Public Services and Procurement Canda (PSPC) into its procurement activities.

To address the risk of forced labour and child labour in our supply chain, CSE has leveraged several PSPC tools designed to enhance transparency and ethical procurement practices, including:

  • Standing offers
  • Supply arrangements
  • Anti-forced labour contract clauses

While PSPC plays a key role as the central purchasing agent for the Government of Canada, CSE conducts procurement independently under its own authority, separate from PSPC-managed tools and frameworks.

In the previous fiscal year, CSE procured goods and services under its own authority, and continues to monitor its procurement practices to ensure compliance with the evolving standards set forth by both PSPC and the Supply Chains Act.

Steps to prevent and reduce risks of forced labour and child labour

At CSE, approximately 7% of the annual value of purchases were made using PSPC tools, such as stranding offers and Supply Arrangements. Additionally, 58% of purchases were made through PSPC using other procurement channels.

Since November 2021, PSPC has implemented anti-forced labour clauses in all goods and services contracts. These clauses ensure that PSPC could terminate contracts where credible evidence exists that goods and services were produced, in whole or in part, using forced labour or human trafficking. Furthermore, as of November 20, 2023, all PSPC standing offers and supply arrangements for goods and services issued, amended, or refreshed have incorporated these anti-forced labour clauses.

In line with this, all our organization’s contracts for goods and services resulting from the use of PSPC tools include these clauses, which stipulate, among other things, human rights and labour rights requirements. These clauses are detailed in Policy Notification 150- Anti-forced Labour Requirements.

For the 2025-2026 fiscal year, CSE purchased 31% of annual value through Shared Services Canada (SSC) for IT equipment under available SSC methods of supply, such as non-specialized equipment and commercial off-the-shelf (COTS) products. Additionally, 5% of CSE’s annual value was purchased under CSE’s own procurement authority.

In accordance with the Supply Chains Act, CSE is continuing to assess, monitor, and report on any suppliers that may pose a risk regarding the use of forced labour and child labour. As an organization, we are actively working to ensure that all procurement practices align with the Supply Chains Act's requirements and prevent the presence of forced or child labour in our supply chains.

Policies and due diligence processes

Effective April 1, 2023, amendments to the Treasury Board Directive on the Management of Procurement require contracting authorities from all departments listed in the Financial Administration Act (FAA), schedules I, I.1 and II, – with the exception of the Canada Revenue Agency (CRA) and commissions established under the Inquiries Act – to incorporate the code into their procurement processes.

As per these amendments, CSE has integrated the code into all its procurement activities, aiming to safeguard the federal procurement supply chain from the risks of forced labour and child labour. Contracts awarded by our organization include provisions from the code through the standard procurement clauses used.

The code mandates that vendors supplying goods and services to the Government of Canada and their subcontractors comply with all applicable laws and regulations. Additionally, the code specifically requires that vendors and their subcontractors adhere to Canada's prohibition on importing goods produced, either wholly or partially, through forced or compulsory labour, which includes both forced child labour and forced labour. This applies to all goods, regardless of their country of origin.

The prohibition on the importation of goods produced using forced labour came into force under the Customs Tariff on July 1, 2020. This amendment was implemented as part of Canada's commitment in the labour chapter of the Canada-United States-Mexico Agreement (CUSMA) and applies to all imports, regardless of their origin.

Furthermore, as per the Supply Chains Act, CSE has been closely monitoring and reviewing procurement processes to ensure that forced and child labour risks are effectively mitigated. We continue to evaluate, refine, and enhance our due diligence efforts to fully comply with the Supply Chains Act's requirements for assessing, preventing, and addressing the presence of forced and child labour in our supply chains.

In May 2021, a risk analysis of PSPC's supply chains was completed by Rights Lab, of the University of Nottingham in the United Kingdom, to determine which goods were at the highest risk of exposure to human trafficking, forced labour, and child labour. The analysis and subsequent report elaborated key strategies for PSPC to leverage public spending power to raise awareness about forced labour in supply chains. We took note of the findings and recommendations of this risk analysis, and are monitoring related follow-up actions, including the implementation of the Policy on Ethical Procurement and the development of human rights due diligence framework.

Also, SSC is conducting ongoing risk identification, promotion, and development of mitigation practices. They are also organizing activities to raise awareness within their procurement community and engage with industry and strategic partners.

At CSE, we recognize the potential risks of forced labour and child labour within global supply chains, particularly in the procurement of goods such as electronics and IT equipment, where upstream sourcing may involve regions with weaker labour protections or enforcement. While CSE currently does not have formal risk assessments or internal policies specifically dedicated to these issues, steps are being taken to align with federal efforts and enhance awareness.

Current risk areas

CSE procures goods and services both domestically and internationally, including IT hardware and specialized equipment. These categories have been identified across government as carrying elevated risk for exposure to forced or child labour in upstream supply chains.

Assessment and risk management steps

  • Third-party verification through the Canadian Centre for Cyber Security (Cyber Centre): CSE's IT procurement requirements are supported by SSC and PSPC. These contracts are subject to Supply chain integrity (SCI) verification conducted by the Cyber Centre, which reviews suppliers from a national security standpoint, including potential risks related to integrity and foreign interference. While not explicitly focused on labour violations, this process contributes to overall supply chain risk management
  • Use of PSPC and SSC procurement channels: CSE primarily relies on PSPC and SSC procurement tools (like SOs and SAs), which incorporate anti-forced labour clauses where applicable. However, CSE contracts issued under its own procurement authority do not yet include specific clauses addressing forced or child labour. These will be integrated once official language is provided by PSPC
  • Guidance and awareness: CSE has not yet developed a formal internal policy on forced or child labour, but it has issued internal guidance on the topic. In addition, CSE references these issues within its broader procurement training on social procurement, and a one-pager is available internally to support staff in understanding the Government of Canada's expectations
  • Planned improvements: CSE is monitoring developments from PSPC, including the release of standardized contract clauses and training materials, and plans to update procurement templates and internal practices accordingly. As guidance evolves, CSE will continue to assess opportunities to strengthen its due diligence framework

Remediation measures for forced and child labour

Following our internal review and supply chain assessment activities during the reporting period, CSE did not identify any instances of forced labour or child labour in its procurement activities or supply chains. As such, no remediation measures were required, and this section is considered not applicable at this time.

CSE remains committed to ongoing monitoring and to implementing appropriate remediation measures should any future concerns arise.

Remediation measures for vulnerable families’ income loss

During the reporting period, CSE did not identify any instances of forced labour or child labour in its procurement activities or supply chains. As a result, no actions were taken that would have led to a loss of income for vulnerable families, and therefore, no remediation measures were required in this context. This section is considered not applicable currently.

CSE will continue to monitor developments and ensure appropriate mitigation or remediation measures are considered should future actions result in such impacts.

Training

As of the latest reporting period, CSE does not provide specific training to employees on forced labour and child labour. However, CSE is aware that PSPC is currently developing awareness-raising guidance materials, including risk mitigation strategies, targeted towards high-risk sectors. CSE is monitoring the development of these materials and plans to leverage these resources upon their publication to enhance internal training and awareness efforts.

Assessing improvement and effectiveness

CSE does not currently have formalized policies or procedures in place to assess the effectiveness of measures aimed at preventing forced labour and child labour in its in-house procurement activities. While CSE incorporates general guidance into procurement practices and references labour risks in internal training related to social procurement, formal assessment mechanisms have not yet been established. CSE is actively monitoring the development of standardized clauses, training materials, and risk mitigation guidance from PSPC, which will be integrated into procurement templates and processes upon publication. In the interim, procurements conducted through PSPC and SSC benefit from established anti-forced labour measures and SCI reviews by the Cyber Centre.

CSE uses PSPC for 68% of goods and 30% for services and SSC for 31% of goods and 12% for services of their purchases, who are monitoring related follow-up action, including the development of a Policy on Ethical Procurement.

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