As of May 31st, 2024, certain private sector entities will be required to submit their first questionnaire and their first annual report under the federal Fighting Against Forced Labour and Child Labour in Supply Chains Act (more commonly referred to as Canada's Modern Slavery Act) (the "Act"). The Act, which applies to both government institutions and certain private sector entities, is Canada's commitment to contribute to the fight against forced labour and child labour through the implementation of reporting obligations.

The Act, which came into effect on January 1st, 2024, brings with it reporting obligations based on certain prescribed thresholds related to an entities assets, revenue and employees. Failure to comply with the reporting obligations under the Act can result in fines and liability for directors and officers.

Overseen by Public Safety Canada, the Act applies broadly to any entity:

  • producing, selling or distributing goods in Canada or elsewhere;
  • importing goods into Canada which were produced outside Canada; or
  • controlling another entity engaged in such production, sale, distribution, or importation.

In addition to the above, an entity must also meet the following thresholds:

  • is listed on a Canadian stock exchange;
  • has a place of business in Canada, does business in Canada or has assets in Canada, and based on its consolidated financial statements, meets at least two of the following conditions for a least one of its two most recent financial year:
  • has at least $20 million in assets;
  • has generated at least $40 million in revenue, and
  • employs an average of least 250 employees; or
  • is prescribed by regulations (we note that the regulations have not yet been enacted).

Entities that meet the above noted thresholds are required to submit a report pursuant to the Act and must complete the steps of the reporting process ahead of the May 31st deadline. For guidance on preparing a report, Public Safety Canada has provided a process overview which can be found here. Such process for reporting is outlined below:

Annual Reporting Obligations

The primary purpose of the annual report (to be submitted on or before May 31st of each year), is to detail the steps taken by the entity, during the 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 in Canada or produced elsewhere and subsequently imported into Canada.

Contributions to this article were also provided by Gabriel Laidlaw-Bale, Cox & Palmer Articling Student.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.