Is Your Company Targeted? Is It Ready?
Effective since January 1st, 2024, the Fighting Against Forced Labour and Child Labour in Supply Chains Act, SC 2023, c 9 ("Act") introduces new obligations that might affect you.
The leading obligation is that as of January 1st, 2024, covered Canadian entities must submit a report to Canada's Minister of Public Safety and Emergency Preparedness, at the latest on May 31st of each year.
Who does it apply to?
The obligation to submit a report applies to any corporation or trust, partnership or other unincorporated organization that:
The size-related thresholds refer to total (global) assets, revenue and employees and are not restricted to Canada.
The Act is not particularly explicit regarding the latest date for a financial year to be considered in the first year of the enacted Act's application, but in the absence of more details in this regard, we must rely on its general interpretation, i.e., any financial year ending on or before May 31st, 2024.
Overview of the process
The reporting entity must submit a report approved and attested from the appropriate governing body or bodies, complete an online questionnaire and publish it on its website.
What does the report contain?
The report must present to the Minister the steps the entity has taken during its previous financial year to prevent and reduce the risk of forced labour or child labour. Published reports can already be consulted as examples on the website of some entities.1
What penalty is incurred by an entity that fails to comply?
The reporting entity that does not meet its new obligations is liable to a fine of not more than $250,000.
Footnote
1 Annual report from Transat A.T. inc. available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.