The Canadian Modern Slavery Act

Modern Slavery

According to the International Labour Organization (ILO), 49.6 million people were living in modern slavery in 2021.

Modern slavery is the exploitation of an individual by others for personal or commercial gain, which can take many forms, but the most common are human trafficking, forced labour, debt bondage/bonded labour, descent-based slavery, child slavery, forced and early marriage, and domestic servitude.

Although there are certain characteristics that can exacerbate the risk of modern slavery at geographic or industry levels, the exploitative practice is a global issue that impacts all countries and sectors. The vast nature of the problem requires action from all countries and companies alike. Fortunately, there are increasing global efforts to address modern slavery through regulatory initiatives, including Canada’s new modern slavery act, the Fighting Against Forced Labour and Child Labour in Supply Chains Act (“the Act”).

The Canadian Modern Slavery Act

What does it aim to achieve?
The Canadian Modern Slavery Act officially went into effect on January 1, 2024. The Act aims to address two forms of modern slavery in supply chains, forced labour and child labour, by mandating that certain entities that fulfill specified criteria report annually on the measures they take to prevent and reduce the risk of forced labour or child labour used in their business operations and supply chains.

Who is eligible?
Companies are required to report under the Act if they produce, sell, or distribute goods in Canada or elsewhere and/or import goods into Canada, or control an entity engaged in any such activities AND

  • Are listed on the Canadian Stock Exchange; OR
  • Have a place of business in Canada, do business in Canada, or have assets in Canada and meet two of the following three criteria for one of its two most recent financial years:
    • $20 million or more in (global) assets
    • $40 million or more in (global) revenue
    • A (global) average of 250 or more employees

What are the requirements?
Eligible entities must produce annual reports – due by May 31st beginning in 2024 – that detail the following information:  

  • Steps they have taken to prevent and reduce the risk of forced labour and child labour in supply chains;
  • Their structure, activities, and supply chains;
  • Their policies and due diligence processes in relation to forced labour and child labour;
  • The part of their operations and supply chains that are at higher risk of forced labour and child labour, and the associated steps they have taken to assess and manage the risks;
  • How they remediate the loss of income to vulnerable families who may be impacted by the elimination of forced labour or child labour in the entity’s operations and supply chains;
  • Trainings employees receive about forced labour and child labour; and
  • How they measure their effectiveness in ensuring that forced labour and child labour are not used in their supply chains.

In addition to the required report, entities must also submit a supplementary questionnaire that collects the information necessary for complying with each of the Act’s reporting requirements.

Consequences for Non-Compliance
If companies who are required to fulfill the Act fail to do so, they could face:

  • Convictions
  • Fines of up to $250,000 CAD for providing false information or failing to comply with the law

How Anthesis Can Support

Anthesis will work with you to design a fit-for-purpose program that meets your timing and budget needs while ensuring that all requirements of the Canadian Modern Slavery Act are fulfilled. While our approach will be determined by each client’s unique circumstances, some illustrative examples of the types of support we can provide clients include:

  • A comprehensive readiness assessment that includes internal document reviews, internal stakeholder engagement, and gap assessments of modern slavery management among corporate operations and supply chains. The findings from the readiness assessment will determine the available information – and the information gaps to address – for fulfilling the Act’s requirements.
  • Leverage our industry-leading Supply Chain Slavery Risk Assessment Tool that measures modern slavery risks across a company’s supply chain. The tool aggregates dozens of global data sets to quantify each vendor’s risks based on geography, product type, business attributes, spend, and other custom information like audit results. 
  • Conduct direct supplier engagement viaour in-house engagement tool,  Anthesis Compliance Suite (ACS), to collect supplementary information about the company’s supply chain, including product, sector, geographic location, audits/certifications, sub-supplier information, sourcing amounts, and locations of operations.
  • Develop strategic roadmaps that address the most pressing modern slavery risks and inform longer-term responsible sourcing and social impact ambitions.
  • Support the development and submission of the report and supplementary questionnaire for the Act by May 31.

Our fundamental approach to the work, while tailored to each client, is designed to help achieve all requirements of the Act efficiently and with long-term strategy in mind.

We are the world’s leading purpose driven, digitally enabled, science-based activator, and always welcome inquiries and partnerships to drive positive change together.