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Canada’s Modern Slavery Act Update – DEALERS MAY NO LONGER NEED TO REPORT

The Fighting Against Forced Labour and Child Labour in Supply Chains Act, formerly Bill S-211, and referred to as Canada's Modern Slavery Act -- DEALERS MAY NO LONGER NEED TO REPORT

Last year Canada introduced new legislation aimed at fighting forced labour and child labour around the world in global supply chains. The Fighting Against Forced Labour and Child Labour in Supply Chains Act, formerly Bill S-211, and referred to as Canada’s Modern Slavery Act came into force on January 1, 2024 and dealers who were required to file a report had until May 31, 2024 to do so or risk facing penalties including fines per offense of up to $250,000, reputational damage and liability for officers and directors.

Based on feedback the government received from CADA and other national associations, Public Safety Canada issued updated guidance regarding reporting under this legislation for next year. One of the more significant changes is that they now state: “Entities solely involved in distributing and selling are not expected to report under the Act. Public Safety Canada will not seek enforcement action in those instances.” This is good news for many dealers who previously had to spend significant time determining if they had reporting obligations under the legislation as it gives greater comfort that businesses that were reporting solely because they engaged in sales or distribution activities won't be subject to enforcement action if they do not report. We note that there may be dealers that still need to report because they are importing goods. The changes to the Guidance do impact the scope of the term importing as well, so that it applies to the true importer of goods (not just limited to the importer of record as it previously was).

CADA was very clear with the Minister's office and the current federal government that this report obligation needed to change. CADA is very pleased that a more reasonable approach is now in place that is in line with the role dealers play in the sale of new vehicles.

For more information, please refer to the updated guidance by clicking here.

This update is not intended as legal or professional advice and should not be construed as such. Dealers should consult with their own individual legal and other professional advisors when considering the contents of this update.

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