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Dealer Alert:  Canada’s New Modern Slavery Act – Does It Impact you?

On January 1, 2024, Bill S211, referred to as Canada’s Modern Slavery Act, came into force.  The Act imposes an obligation on businesses meeting certain criteria to report annually by May 31 on measures taken to prevent and reduce the risk of forced or child labour being used in their supply chains. If required to file a report, dealers must: scrutinize its supply chains, gather the information required to prepare, obtain board approval, complete the online questionnaire and file their initial report with Public Safety Canada and post it on the business’s website by May 31st, 2024. Failure to comply could result in significant penalties, reputational damage and liability for officers and directors.


WHO MUST REPORT

Aside from government institutions, the targeted entities under the Act are corporations, trusts, partnerships or unincorporated organizations that:

  • produce, sell or distribute goods in Canada or elsewhere;
  • import goods into Canada; or
  • control another entity involved with any of the above.


To qualify, the above entities must also either (i) be listed on a Canadian stock exchange or (ii) have a place of business or assets in Canada or do business in Canada and meet two of the three following criteria for at least one of its two most recent financial years, calculated based on consolidated financial statements:

  • $20 million in total (global) assets
  • $40 million in gross revenue
  • employs at least 250 total employees


NEXT STEPS & FURTHER GUIDANCE

CADA hosted a webinar on March 28th, which was recorded for member usage.  The link to the webinar, along with links to additional information and a letter from GAC and CVMA regarding OEM references in this space, are noted below.

  • https://cada.ca/CADA/CADA/Education/Dealer/Webinars.aspx?hkey=477184d3-0498-4648-891a-06dee693fe40

Dealers should consult with their advisors and prioritize determining whether they have a reporting obligation under the Act, and if so, they should scrutinize its supply chains and monitoring practices, gather the information they require to prepare their initial report and complete the online questionnaire by May 31st, 2024; bearing in mind timelines that may be required for board approval. Dealers may also find the following links to the Federal Government Public Safety Canada website useful sources of information regarding the Act:

  • https://www.publicsafety.gc.ca/cnt/cntrng-crm/frcd-lbr-cndn-spply-chns/index-en.aspx,
  • https://www.publicsafety.gc.ca/cnt/cntrng-crm/frcd-lbr-cndn-spply-chns/sbmt-rprt-en.aspx

In addition, the following link to the McCarthy Tetrault Guide on the Reporting Obligations Under the Act may serve as a helpful starting point for discussions regarding potential contents of a Report:

  • https://www.mccarthy.ca/en/insights/books-guides/modern-slavery-guidebook-reporting-requirements-under-fighting-against-forced-labour-and-child-labour-supply-chains-act

This Memo 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 Memo.

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