Contact us: Supply Chains Act Implementation

Subsidiaries must determine if they have reporting obligations independently from their parent company. If a subsidiary does not meet the definition of entity they do not have reporting obligations. The subsidiary should evaluate its own financial statement (not the consolidated financial statement of the parent company that controls it) to determine if it falls within the size-related thresholds outlined in the definition of “entity.”

When determining if they are an “entity” for the purposes of the Act, corporations, trusts, partnerships, and other unincorporated organizations should use consolidated financial statements to assess revenue, assets and employees and include the revenue, assets and employees of any entity it controls (i.e., its subsidiaries).

If both a parent company and its subsidiary are captured by the definition of entity and they are subject to reporting obligations, they may submit a joint report. Please refer to the guidance for more information about joint reports.

Reporting requirements are for entities producing goods in Canada or elsewhere or importing goods produced outside Canada. Reporting requirements are also for entities controlling other entities engaged in these activities.

If a foreign corporation meets the definition of entity and the criteria of a reporting entity, then the foreign parent company is subject to the reporting requirements.

If both a parent company and its subsidiary are captured by the definition of “entity”, and they are subject to reporting obligations, they may submit a joint report. This includes a situation where a foreign parent company wishes to submit a joint report that includes its Canadian subsidiaries.

An entity is considered to be importing goods into Canada if the entity is responsible for accounting for those goods under the Customs Act. An entity buying a good in a domestic transaction, who is not causing the importation is not, generally, an importer. Purchasing goods produced outside Canada from a third party, where that third party is considered to be the importer for the purposes of the Customs Act, does not count as importing goods.

To determine if they are “doing business in Canada”, entities may use the factors considered by the Canada Revenue Agency when determining if a non-resident person is “carrying on business in Canada” for GST/HST purposes. Refer to the guidance for more information.

Provincial and municipal governmental institutions are not subject to the reporting requirements as per the definition of “government institutions” in the Act. However, some provincial agent Crown corporations may be subject to the reporting requirements by falling under the definition of “entity." It is their responsibility to determine whether they are a reporting entity under the Act.