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Modern Slavery Legislation Update

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Modern Slavery Legislation Update Aquilina Law October 4, 2023

Modern Slavery Legislation Update

On May 11, 2023, Canada passed Bill S-211: An Act to Enact Fighting Against Forced Labour and Child Labour in Supply Chains Act and to Amend the Customs Tariff (the “Act”). The Act, which will come into force on January 1, 2024, was enacted to action Canada’s international commitment to combat forced labour and child labour by imposing certain obligations on (i) government institutions producing, purchasing or distributing goods in Canada or elsewhere; and (ii) certain business entities producing goods in Canada or elsewhere or importing goods produced outside Canada.

“Business entities” are defined in the Act as a corporation, trust, partnership, or other unincorporated organization that:

  • is listed on stock exchange in Canada; or 
  • 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 at least one of its two most recent financial years:
    • has at least $20 million in assets;
    • has generated at least $40 million in revenue; or
    • employs an average of at least 250 employees.

The Act requires that business entities report to the Minister of Public Safety and Emergency Preparedness on or before May 31 of each year the measures taken to prevent and reduce the risk that child labour or forced labour at any step of the production of goods in Canada or elsewhere by the entity, or of goods imported into Canada by the entity.

The report must include the following information of the reporting entity:

  1. its structure, activities, and supply chains;
  2. its policies and its due diligence processes in relation to forced labour and child labour;
  3. the parts of its business and supply chains that carry a risk of forced labour or child labour being used and the steps it has taken to assess and manage that risk;
  4. any measures taken to remediate any forced labour or child labour;
  5. any measures taken to remediate the loss of income to the most vulnerable families that results from any measure taken to eliminate the use of forced labour or child labour in its activities and supply chains;
  6. the training provided to employees on forced labour and child labour; and
  7. how the entity assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains.

Further, the report must be approved by the entity’s governing body (such as the Board of Directors), evidenced by a statement that sets out whether it was approved pursuant to the approval of the governing body and the signature of one or more members of the governing body of each entity that approved the report.

Finally, reports will be made available to the public in two ways:

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

In the case of entities incorporated under the Canada Business Corporations Act or under any other federal law, the report must also be distributed to each shareholder, along with the entity’s annual financial statements.

Foreign corporations with Canadian counterparts should prepare for the Act’s coming into force by determining whether the reporting requirements under the Act are applicable. If it is determined that a foreign corporation falls under the definition of “business entity”, it is expected to conduct the necessary due diligence to assess risks of forced labour and/or child labour in its supply chains.

Every person or entity that fails to comply with the Act is guilty of an offence punishable on summary conviction and liable to a fine of up to CAD $250,000, including directors, officers, agents, or any person that participated in the commission of an offence under the Act.

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