Bill S-216, An Act to enact the Modern Slavery Act and to amend the Customs Tariff, was re-introduced late last year in the Canadian Senate. Bill S-216 is an update of Bill S-211, which was introduced in the previous legislative session but died on the Order Paper when Parliament was prorogued in August 2020.
As its name suggests, the Bill aims to contribute to the fight against modern slavery and focuses on forced labour and child labour. The Bill imposes an obligation on certain entities to report on the measures taken to prevent and reduce the risk that forced labour or child labour is used at any step in the production of goods in Canada or elsewhere by the entity or in the production of goods imported into Canada.
If the Bill is passed, it would apply to any entity that:
a) produces or sells goods in Canada or elsewhere;
b) imports into Canada goods produced outside Canada; or
c) controls an entity engaged in any activity described in paragraph (a) or (b).
“Entity” is defined as a corporation, trust, partnership, or other unincorporated organization that:
a) is listed on a Canadian stock exchange; or
b) has a place of business in Canada, does business in Canada or has assets in Canada and that, based on its consolidated financial statements, meets at least two of the following conditions for at least one of its two most recent financial years:
(i) it has at least $20 million in assets,
(ii) it has generated at least $40 million in revenue,
(iii) it employs an average of at least 250 employees; or
c) is prescribed by regulations.
Entities under the Act would be required to provide the Minister of Public Safety and Emergency Preparedness with an annual modern slavery report, no later than 180 days after the end of each financial year of the entity. The annual report is required to address the following information:
- The structure of the business and the goods that it produces or that it imports into Canada;
- Its policies in relation to forced labour and child labour;
- Its activities that carry the risk that forced labour or child labour is being used and the steps it takes to assess and manage that risk;
- Any measures taken by the business to remediate any forced labour or child labour situations; and
- Any training provided to employees of the business on forced labour and child labour.
The report must include an attestation made by a director or officer of the business that the information in the report is true, accurate and complete. Additionally, the report must be made available to the public and must be posted in a prominent place on its website.
In the event of non-compliance, the Minister may order any reasonable measures to bring the entity into compliance. Any entity found guilty of an offence is liable to a fine of up to $250,000 per offence. There is also director, officer and agent liability where if the individual has any role in directing, authorizing, participating or acquiescing in the business’ contravention of its statutory requirements, he/she is party to and guilty of the office.
If Bill S-216 becomes law, Canada will be joining the United Kingdom, Australia, France, the Netherlands, and the State of California in the battle to end modern slavery. Canadian companies with foreign operations or foreign companies with ties to Canada will then need to be aware of their new legal obligations.
Article by Martin Aquilina with assistance from Andrea Parodis.