A new law that took effect in 2024 will require companies across Canada to file new annual reports by the end of May 2025.
The Fighting Against Forced Labour and Child Labour in Supply Chains Act affects companies with 250 or more employees and assets exceeding $20 million or revenues surpassing $40 million. Because the report is a recurring annual requirement and most companies’ financial years run Jan. 1 to Dec. 31, the deadline for their reports is May 31, 2025.
All publicly listed companies on the stock exchange and government institutions are automatically subject to the legislation.
Organizations must first determine if they qualify as an “entity” under the Act. If they do, the companies must assess whether their activities create a reporting obligation.
Reporting obligation applies only to entities that produce goods in Canada or elsewhere; import goods produced outside Canada; or control another entity that produces or imports goods.
Production of a mandatory annual report includes information about the company’s organizational structure, business Aactivities, policies addressing forced and child labor and the measures implemented to mitigate associated risks. The report can also include training provided to employees on these matters. Following verification and certification by the Minister, the report must be made publicly available.
Corrective measures and penalties comprise the following:
- The Minister retains the authority to order any corrective measures deemed necessary at any point to ensure adherence to the production of the report and its public disclosure.
- Non-compliance with these new requirements, among others, constitutes an offense, with a maximum penalty of $250,000.
- Submitting a report with false or misleading information can be subjected to punitive action, with a maximum fine of $250,000.
To prepare a report, click here.
To submit a report, click here.
