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  • ESG Impact

Canada's Passage of the Modern Slavery Act: A Milestone in Combating Exploitation

In a significant milestone towards combating human trafficking and forced labour, Canada passed the Modern Slavery Act on May 3 2023. This legislation, enacted to eradicate modern slavery within its borders and address the country's role in global supply chains, represents a crucial step forward in protecting human rights and promoting ethical practices.

Canada Modern Slavery Legislation
Canada Modern Slavery Legislation

The Modern Slavery Act establishes a comprehensive framework to prevent, detect and respond to modern slavery offences. It requires companies with at least $330 million in annual gross revenue to report on measures taken to address the risk of forced labour in their operations and supply chains. The provisions of reporting are expansive, and under its ambit fall companies listed on Canada's stock exchange; or companies that have their place of business in Canada, do business in Canada or have their assets in Canada and (based on its consolidated financial statements) meet at least two of the following conditions for at least one of its two most recent financial years.

  • Any company that has at least $20 million in assets

  • Any company that has generated at least $40 million in revenue

  • Any company that employs an average of at least 250 employees

It empowers authorities to impose penalties on individuals or entities found guilty of engaging in such practices, including offences punishable by summary conviction and a fine of over $250,000. Furthermore, the legislation establishes mechanisms to support and protect victims of modern slavery, offering them access to legal aid, counselling and other necessary services.

The act entails that government institutions and entities report, on or before 31 May each year, to the Minister of Public Safety and Emergency Preparedness the steps taken during the previous financial year to prevent and reduce the risk that forced labour or child labour is used-

(i) in the case of government institutions, at any step of the production of goods produced, purchased or distributed by the government institution; and

(ii) in the case of entities, at any step of the production of goods in Canada or elsewhere by the entity or of goods imported into Canada by the entity.

This report must also include the following:

  1. The mapping of a company's supply chain and monitoring risk at all levels, including for risky commodities like cobalt, cotton and palm oil.

  2. Due diligence processes and policies concerning forced/ child labour.

  3. Risk analysis of a company's complete supply chain and the steps taken to assess and manage that risk.

  4. Remedial measures taken to address forced or child labour.

  5. The measures in place to compensate for the loss of income resulting from the elimination of forced or child labour.

  6. Employee training information.

In conclusion, Canada's passage of the Modern Slavery Act marks a significant milestone in the fight against human trafficking and forced labour. By implementing comprehensive reporting requirements, enhancing law enforcement capabilities and supporting victims, Canada demonstrates its commitment to eradicating modern slavery within its borders and promoting ethical practices globally. This legislation sets a powerful example for other countries and contributes to the broader international effort to achieve the United Nations Sustainable Development Goals.

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