What every business owner needs to know about Canada’s newly-enacted modern slavery legislation

Written by Ashley Prommer, Articled Student

Canada’s modern anti-slavery legislation is now in force and is laying out a new standard of reporting requirements and responsibilities for Canadian businesses and their supply chains.

On January 1, 2024 the federal government enacted the Fighting Against Forced Labour and Child Labour in Supply Chains Act (“the Act”). First introduced to Parliament in 2021, the purpose of the Act is to “increase industry awareness and transparency and drive businesses to improve practices”.

Forced labour and child labour is predominantly found in the global supply chains of businesses, resulting in the risk that goods imported and distributed in Canada are a product of modern slavery. Certain businesses, organizations, and government institutions are now required to report on their efforts to prevent and reduce the risk of modern slavery in their supply chains. The information received through the reports will be tabled in an annual report to Parliament by the Minister of Public Safety.

Here are some things that you need to know if you operate a business in Canada: 

1. The Act applies to certain business entities and government institutions

There are two steps in determining whether a business or organization is considered an “entity” under the Act.

First, the business must be a corporation, trust, partnership or unincorporated organization whose activities include:

  • Producing, selling or distributing goods in Canada or elsewhere,
  • Importing goods into Canada, and/or
  • Controlling an entity engaged in any of these activities.

Second, the business must be a “reporting entity”, such that it is:

  1. Listed on a stock exchange in Canada, or
  2. Has a place of business in Canada, does business in Canada or has assets in Canada, and meets two of the following three criteria for at least one of its two most recent financial years:
  • $20 million or more in assets,
  • $40 million or more in revenue, and/or
  • An average of 250 or more employees.

If a business or organization satisfies the two steps described above, it is considered an entity within the meaning of the Act and is subject to the reporting requirements therein. 

A “government institution” is subject to the Act if it is:

  1. A department or ministry of the Government of Canada, or a body or office (see Schedule I); or
  2. A parent Crown corporation or wholly-owned subsidiary of such a corporation (see section 83 of the Financial Administration Act). 

The reporting requirements apply to all government institutions whose activities include producing, purchasing or distributing goods in Canada or elsewhere.

2. The reporting requirements under the Act

Entities and government institutions must submit an annual report to the Minister of Public Safety by May 31 of each year. Accordingly, the first report will be due on May 31, 2024.

The reports must detail the steps taken during the previous financial year to prevent and reduce the risk that forced labour or child labour is used by them or in their supply chains.

Reports must be made available to the public in two ways:

  1. In a prominent location on the reporting entity or government institution’s website, and
  2. In an electronic registry on Public Safety Canada’s website.

3. The steps of the report process

The reporting requirements will continue to develop and may be subject to change in the coming years. As of January 1, 2024 the process for submitting a report under the Act is as follows:

  1. Prepare a report that meets all of the requirements of the Act
  2. Receive approval and attestation from the appropriate governing body
  3. Complete the online questionnaire that addresses each requirement of the Act
  4. Upload the completed report at the end of the questionnaire
  5. Publish the submitted report on the entity’s website

4. Takeaways

The Fighting Against Forced Labour and Child Labour in Supply Chains Act is fundamental to Canada’s fight against modern slavery in the global supply chain. Requiring particular businesses and organizations to report on their efforts to prevent and reduce the risk of modern slavery is advantageous for all those involved.

Moving forward, the reporting requirement will expose unlawful business practices and aid in the prevention of modern slavery within national and international supply chains. In addition, it will impose a form of transparency between Canadian businesses that will foster collaboration and innovation in the pursuit of legislative compliance. 

If you have questions about how your business might be affected by Canada’s newly-enacted legislation or any other questions about employment-related matters, contact Kent Employment Law today and speak to a lawyer.

Visit the Public Safety Canada website for more information and guidance on the report process.

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