First annual report on Canada’s modern slavery legislation tabled in Parliament

Public Safety Canada has published its inaugural annual report about the first year of reporting under Canada’s new modern slavery legislation.

Overview of Canada’s modern slavery legislation

The Fighting Against Forced Labour and Child Labour in Supply Chains Act (the Act) requires certain entities to report annually on the steps taken during the previous financial year to prevent and reduce the risk that forced labour or child labour is used at any step in the production of goods that they produce or import into Canada. The Act applies to entities that meet certain size and connection-to-Canada tests and that produce, sell or distribute goods or import goods into Canada.

The Act came into force on January 1, 2024, with the first reports due by May 31, 2024. A total of 5,560 reports from entities (other than government institutions) were received by Public Safety Canada prior to the deadline.

Overview of Public Safety Canada’s report to Parliament

The Act requires Public Safety Canada to provide to Parliament an annual report that includes the following information about the previous reporting period:

• a summary of the activities that reporting entities have identified carry a risk of forced labour or child labour being used;
• the steps that reporting entities have taken to assess and manage that risk;
• the measures, if any, taken by reporting entities to remediate any forced labour or child labour; and
• any orders made by Public Safety Canada to ensure compliance with the Act and any charges laid against an entity for failure to comply with the Act.

The first annual report from Public Safety Canada was tabled in Parliament on September 27 (the 2024 Annual Report). It is largely based on data collected through the online questionnaires that entities were required to complete at the time they filed their modern slavery reports, supplemented by a review of a sample of the filed reports.

Key findings from the 2024 Annual Report

The following are some of the key findings noted by Public Safety Canada regarding the reports received from entities prior to the 2024 reporting deadline:

Information about the entities that filed reports

• joint reports: 37% of the reports are joint reports, meaning they were made by more than one entity from the same corporate group;
• multijurisdictional: 14% of entities indicated they are also subject to the modern slavery-related legislation of another country or region, such as the United Kingdom, California or Australia;
• foreign: 18% of reporting entities are headquartered outside of Canada;
• industry: reports were filed primarily by entities in the manufacturing industry (38%), followed by the wholesale trade and retail trade (22% each);  

Identification of risks of forced labour and child labour

• assessment progress: 38% of entities stated they had already identified parts of their activities and supply chains that carry a risk of forced labour or child labour being used, while 39% had started the process and 22% had yet to do so;
• areas of risk: the most commonly identified areas of risk are the raw materials or commodities used in the supply chain (23%), the sector or industry of the entity (21%), the entity’s direct (tier 1) suppliers (20%), the locations of its activities, operations or factories (19%) and the types of products it sources (19%);

Steps taken to assess and reduce risks of forced labour and child labour

• overview of steps taken: the most common steps taken by entities to prevent or reduce risks of forced labour or child labour are conducting internal assessments (50%), developing and implementing due diligence policies and processes (45%), monitoring suppliers (38%), developing employment standards, codes of conduct and/or compliance checklists (37%), and maintaining internal employment-related controls (34%);
• policies and due diligence processes: 71% of entities stated they have policies and due diligence processes in place related to forced labour and/or child labour;
• employee training: 44% of entities reported they provide training to their employees on the topic of forced labour and/or child labour, with 40% of those entities imposing mandatory training on all employees (and not just those performing specific functions);
• assessment of effectiveness: 44% of entities indicated that they have policies and procedures in place to assess their effectiveness in ensuring that forced labour and child labour are not being used in their activities or supply chains;

Remediation efforts

• instances of remediation: 4% of entities reported that they had taken measures to remediate instances of forced labour or child labour, while the vast majority of entities (88%) indicated that the question was not applicable to them as they had not identified any forced labour or child labour in their activities or supply chains; and
• remediation of lost income: only 1% of entities reported that they had taken measures to remediate the loss of income to the most vulnerable families resulting from any measures taken to eliminate the use of forced labour or child labour in their activities or supply chains, while the vast majority (91%) stated that the question was not applicable.

Enforcement actions

Consistent with Public Safety Canada’s comments in early 2024 that the government would take a more educational approach in this first year of reporting, the 2024 Annual Report confirms that no enforcement orders were made or charges laid to date under the Act.

Next steps

The 2024 Annual Report is available from the Library of Parliament and we understand will be made accessible on the Public Safety Canada website in the coming weeks. 

Public Safety Canada first published guidance to help organizations comply with the requirements of the Act in December 2023, which was updated in March 2024. Following this first reporting period, we anticipate that the ministry will publish further amended guidance later this fall. 

The next annual reports by entities are due by May 31, 2025.