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Canada Requires Companies to Report on Their Forced and Child Labor Efforts By May 31

The deadline for filing a report under Canada's Fighting Against Forced Labour and Child Labour in Supply Chains Act is fast approaching on May 31, placing reporting duties at the forefront for many companies doing business in Canada. 

Under the law, reporting entities include any corporations doing business in Canada that meet two of the following three criteria for at least one of its two most recent financial years: 

  • $20 million or more in assets 
  • $40 million or more in revenue 
  • An average of 250 or more employees

The big picture: The Act requires reporting entities to outline measures taken to prevent forced and child labor and disclose details about their supply chains, policies, and due diligence processes. This aims to address the issue on a broader scale and foster transparency.

  • A reporting entity can file a joint report that covers its own operations and supply chains, as well as those of its subsidiaries and other controlled entities within the same corporate group. 

  • The governing body of the reporting entity (i.e., board of directors) must approve the report, including the joint report. 

  • Reporting entities must publish their reports prominently on their websites. Additionally, those incorporated under Canadian federal legislation must provide their report to all shareholders with their annual financial statements.  

HR Policy Global’s View: Ensuring compliance with the Act is crucial as failure to do so can lead to fines of up to $250,000 and personal liability for directors and officers involved. HR Policy Global’s recent paper Enduring Risk in Canadian Employment Law – 2024 provides guidance on this issue. 

Actions that members can take now: HR teams should:

  • Perform a gap analysis on crucial policies and procedures, including the human rights policy, corporate code of conduct, recruitment policy, and whistleblowing policy. 

  • Provide advice on risk and mitigation strategies both domestically and internationally, including to scrutinize the use of staffing agencies or subcontractors, measure operational practices against relevant labor laws and standards, and train employees to recognize and assess forced labor/child labor risks. 

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Authors: Wenchao Dong

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