In A Flash

Company Supply Chains and Child or Forced Labour: Is Modern Slavery – Supply Chain Legislation heading to Canada?

The Government is expected to enact a “modern slavery” bill that will require companies to examine supply chain and produce annual reports.  The Fighting Against Forced Labour and Child Labour in Supply Chains Act has travelled through the Senate, where it originated, and the House of Commons and awaits examination by the Standing Committee on Foreign Affairs and International Development. Once the bill passes the committee stage it must go through third reading. It could receive Royal Assent as early as January 1, 2023.

The legislation’s stated purpose is for Canada to “contribute to the fight against modern slavery,” as a party to the International Labour Organization’s Forced Labour Convention, 1930 (No.29), the Abolition of Forced Labour Convention, 1957 (No.105) and the Worst Forms of Child Labour Convention, 1999 (No.182).  Canada has ratified Conventions No.29 (in June 2011), No.105 (in July 1959) and No.182 (in June 2000) and is therefore bound by their terms. 

The International Labour Organization (ILO) is a specialized UN agency devoted to promoting social justice and labour rights. The ILO, within its tripartite structure that includes representatives of governments, employers and workers, creates and supervises international labour standards, such as those referenced above.

The proposed legislation would require Canadian entities, which produce, sell, or distribute goods in Canada, import foreign goods into Canada, or control entities which do will need to produce an annual, public report about their corporate structure and supply chains. The reports must detail the companies’ actions toward eliminating forced labour and child labour. The bill will apply to government institutions, public companies listed on Canadian stock exchanges, or corporations, trusts, partnerships, and unincorporated entities which meet certain size thresholds. In at least one of the two prior financial years, they must have two of the three: $40 million in revenue, $20 million in assets, or 250 employees.  Notably, the legislation is unclear on whether, for foreign companies doing business in Canada, the size thresholds apply to their global operations, or only their Canadian operations.

Sonia Regenbogen, who has served as the global employer spokesperson for the Committee on the Application of Standards at the International Labour Organization (ILO) and has analyzed the obligations for governments of international labour standards, notes that this legislation could impose significant requirements on companies.  She notes that this proposed legislation includes a requirement that companies must include steps that it took to prevent and reduce the risk of forced labour or child labour being present in their operations, policies and due diligence processes in place to address the issue, and any measures companies took to remove forced labour or child labour. When companies find and eliminate forced and child labour, the company will also be required to report on what it did to “remediate the loss of income” for the families of those who were engaged in the labour.  Failure to comply with reporting obligations will invite a potential fine of up to $250,000, which may also apply to directors, officers, agents, and mandataries.

If you have any questions about this topic, or any questions relating to workplace law generally, please do not hesitate to contact a Mathews Dinsdale lawyer.

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