This is the first annual report of The Dufresne Group Inc. (“TDG”) under the Fighting Against Forced Labour and Child Labour in Supply Chains Act, S.C. 2023, c. 9 (the “Act”). The report is for the fiscal year ending December 31, 2023.
The report includes the following subsidiaries of TDG:
TDG is a retail furniture business with operations across Canada. It owns 12 Dufresne Furniture and Appliances retail locations across Ontario, Manitoba and Saskatchewan, as well as the www.dufresne.ca retail website. Dufresne stores sell furniture, appliances, mattresses and home electronics.
TDG also owns 39 Ashley Furniture retail locations across Ontario, Manitoba, Saskatchewan, Alberta and British Columbia, as well as the www.ashley.ca retail website. Ashley Furniture sells furniture and mattresses. The business also sells appliances in seven of the 39 retail locations, as well as through the retail website.
TDG is a privately owned business with a non-unionized workforce. It meets the threshold for an “entity” under the Act because it generates more than $40 million in annual revenue and has more than 250 employees. All of TDG’s operations and employees are based in North America and the business follows the applicable North American labour laws.
As a retail business, TDG does not manufacture its own furniture or appliances, nor does it directly or indirectly control any manufacturers. Instead, it sources product from a limited number of large and well-established suppliers with business operations in Canada and the United States. Approximately 95% of TDG’s product is sourced from only 20 vendors.
The following table illustrates the location of TDG’s vendors.
TDG’s vendors source from manufacturing facilities in Canada, the United States, Mexico, Vietnam, China and Malaysia. Approximately 25% of total goods originate outside of North America. TDG sources internationally manufactured goods through North American direct manufacturers with overseas facilities, as well as through two manufacturing agents who source
from Asia.
TDG maintains close working relationships with well-established suppliers to ensure ethical manufacturing and labour practices. TDG’s values include fair and equitable pay and treatment of employees. It has communicated those values to its suppliers and expects them to meet the same standard.
TDG Furniture Inc. and Furniture Investment Group are the operating entities for the 39 Ashley Furniture retail locations, and are subsidiaries of TDG.
DFA Operations Inc. is another subsidiary of TDG and is the operating entity for Dufresne branded stores.
Overall, TDG has concluded that there is a low risk of forced labour or child labour being used in TDG’s supply chain. The majority of the furniture and appliances sold by TDG and its subsidiaries are manufactured in North America. The primary non-North American sources of product are Vietnam, Malaysia and China. These countries no longer represent a high risk of forced labour or child labour. TDG notes that:
While Vietnam represents the highest risk of child labour, the overall prevalence of child labour in Vietnam is comparatively low, with Vietnam ranked in 71st place for child labour participation. To the best of TDG’s knowledge, TDG does not source any product from countries in Central Africa
for which the rate of child labour is highest. TDG’s primary challenge in tracking its supply chain is that the business operates as a retailer only and is not vertically integrated. As such, it must rely on suppliers. While suppliers label the country of origin for assembled products, TDG has no insight as to where the individual components for such products (e.g., the upholstery for furniture) are sourced.
TDG has conducted an awareness training on the new legislation that has focused on Canada’s obligations with respect to the elimination of forced labour and child labour, the specific obligations arising from the Act, and an assessment of TDG’s supply chain and resulting risks. TDG’s board of directors, advisory board members, the executive across all departments of the business, and all employees with authority over the sourcing of goods have participated in the training.
TDG works with respectable suppliers, many of whom likely also meet the “entity” threshold for reporting under the Act. Before working with a new supplier, TDG makes inquiries with the potential supplier about their sourcing practices, compliance with local laws and business customs, and matters relating to product quality and reliability of supply. Historically, TDG has not made specific inquiries into labour practices, but the business is in the process of integrating such inquiries into its supplier and vendor due diligence. TDG intends to establish a process to review the labour practices of its suppliers more frequently and follow up if there is a non-negligible risk that the supplier may be relying on forced labour or child labour.
TDG is also actively meeting with its suppliers and sourcing partners to gain a deeper understanding of their business practices and increase accountability. As part of this process, TDG is developing a vendor questionnaire and vendor code of conduct relating to forced labour and child labour. The results of the questionnaires will provide TDG with additional information against which to assess its effectiveness in ensuring that forced labour and child labour are not
being used in its supply chain.
TDG does not conduct factory inspections facilities.
TDG notes that its imported products already must comply with the prohibition against forced labour and child labour as set out in the Customs Tariff.
To date, TDG has not encountered any instances of forced labour or child labour in its supply chain. As such, the business has not had to take any measures to remedy specific misconduct or to remediate the loss of income to vulnerable families resulting from such measures.
In accordance with the requirements of the Act, and in particular section 11 thereof, we attest that we have reviewed the information contained in the report for the entity or entities listed above. Based on our knowledge, and having exercised reasonable diligence, we attest that the information in the report is true, accurate and complete in all material respects for the purposes of the Act, for the reporting year listed above.
