Are You Ready? Canada’s Modern Slavery Report Due May 31

24 May Are You Ready? Canada’s Modern Slavery Report Due May 31

Kelly Harris + Jane Huang

Organizations that produce, sell, or distribute goods in Canada may be required to file their first report on forced labour in their supply chains by May 31, 2024. Entities captured by the Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Supply Chains Act”) are subject to new reporting obligations as part of Canada’s international commitment to address and eradicate exploitative practices from supply chains. In preparation for the May 31 reporting deadline, we have outlined some compliance requirements under the Supply Chains Act.

Who is Required to Report?

Many organizations could be captured by the Supply Chains Act reporting obligations. Reporting obligations apply to any corporation, trust, partnership, or organization that is listed on a Canadian stock exchange, has a place of business in Canada, does business in Canada, or has assets in Canada. To meet the threshold for filing a report, the entity must also meet at least two of these criteria in the past two financial years: $20 million or more in assets, $40 million or more in revenue, or an average of 250 or more employees.

Be sure to consider which entities need to be covered in your report, and whether the Canadian reporting obligations could be combined with existing reports. For example, many businesses have elected to include this information in annual reports, as part of reports on corporate environmental, social, and governance activities, and/or in similar modern slavery reports required by other jurisdictions, such as in the United Kingdom and California.

What are the Reporting Obligations?

The report must include the following information:

• The entity’s structure, activities, and supply chains
• Policies and due diligence processes in relation to forced child labour
• How the entity assesses the effectiveness of its policies and due diligence processes
• Parts of the entity’s business and supply chain that carry a risk of forced labour or child labour
• Measures that the entity has taken during the previous financial year to prevent and reduce the risk that forced labour or child labour is used at any step in its production or importation of goods (if any)
• Measures to remediate the loss of income to vulnerable families from the measures taken to remediate (if any); and
• A description of training programs

If a company assesses that its activities don’t carry a risk of forced or child labor, then it can meet the Supply Chains Act requirements by simply stating that it does not have measures to report on.

Where Does the Report Need to be Filed and Published?

Entities with reporting obligations must publish their annual report on their website and provide the same information to Public Safety Canada using its online questionnaire. The report must also include a signed attestation evidencing approval by the entity’s governing body. The Government of Canada also intends to publish these annual reports in a centralized electronic registry, so be careful not to include any confidential business information.

The measures introduced by the Supply Chains Act aim to increase industry awareness, drive businesses to improve their existing practices, and enhance transparency around labour practices. If your business hasn’t yet prepared its report, there is still time to confirm whether it is required, and to put together a basic report addressing the prescribed disclosures.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Companies are encouraged to seek legal counsel to ensure compliance with the Fighting Against Forced Labour and Child Labour in Supply Chains Act and other applicable laws.