The newly enacted Fighting Against Forced Labour and Child Labour in Supply Chains Act came into effect on January 1st, 2024, impacting companies with 250 or more employees and assets exceeding $20 million or revenues surpassing $40 million. Notably, all publicly listed companies on the stock exchange and government institutions are automatically subject to this legislation.

This legal development aligns with a broader trend in Western nations to adopt stringent measures against "modern slavery" and to fulfill Canada's international commitments on this critical issue. In essence, the law compels Canadian companies to enhance transparency by publicly disclosing their efforts in combating forced and child labor.

Overview Of Implications For Companies 

This law has new implications for companies/institutions starting this year, here are some of them:

Production of a mandatory annual report

• Annually, relevant organizations are required to explain their efforts and actions during the past financial year aimed at mitigating forced and child labour in their production of goods and supply chains. 
• The report must be submitted online to the Ministry by May 31 of every year, even in 2024. 
• The report must include: information about the company’s organizational structure, business activities, policies addressing forced and child labour and the measures implemented to mitigate associated risks. The report can also include training provided to employees on these matters. It is noteworthy that, presently, there are no specific "indicators" for evaluating the reasonableness of a company's efforts.
• Following verification and certification by the Minister, the report must be made publicly available. Specifically, it must be easily accessible on the websites of the respective companies and institutions.

Corrective measures and penalties:

• The Minister retains the authority to order any corrective measures deemed necessary at any point to ensure adherence to the production of the report and its public disclosure.
• Non-compliance with these new requirements, among others, constitutes an offense, with a maximum penalty of $250,000.
• Submitting a report with false or misleading information can be subjected to punitive action, with a maximum fine of $250,000.

Initiating the Report Process:

If you are ready to delve into the details of the format and the types of information to be provided, review the resources below:

Finally, it's essential to note that the report is now a recurring annual requirement. Maintaining a record of the process for the current year can streamline the production of subsequent reports in the future.