As expectations around transparency and responsible business conduct continue to rise Canada has introduced a major piece of legislation aimed at eliminating forced labour and child labour from global supply chains. The Fighting Against Forced and Child Labour in Supply Chains Act establishes new reporting obligations for qualifying organizations and places direct accountability at the board level.
The law requires covered entities to publish annual reports approved by their boards that explain how they identify prevent and reduce the risk of forced and child labour across their supply chains. These disclosures are designed to strengthen oversight improve due diligence practices and protect vulnerable workers.
Failure to comply can lead to penalties for both organizations and their officers particularly where reports are missing incomplete or misleading. As a result businesses must now treat supply chain governance as a core compliance priority supported by accurate records and documented processes.
This guide explains what the Act covers who must comply and how organizations can respond effectively.
Overview of Canada’s modern slavery legislation
The Fighting Against Forced and Child Labour in Supply Chains Act requires certain organizations to prepare and publish a detailed annual report that outlines actions taken to prevent and reduce labour abuses within their operations and supply chains. Each report must be formally approved by the organization’s governing body and made publicly available.
The legislation also introduces enforcement measures including fines for failing to file a report or providing inaccurate information. To meet these expectations organizations must adopt structured due diligence programs and maintain clear evidence to support their disclosures.
Which organizations are covered by the Act
The Act applies to a wide range of organizations with a connection to Canada. This includes public companies private businesses that meet specific size thresholds and entities involved in importing goods into the country. Many international organizations may also fall within scope if they control or are linked to a business operating in Canada.
An organization is generally covered if it is listed on a Canadian stock exchange or if it has a business presence or assets in Canada and meets at least two of the following criteria in one of the last two financial years. It holds assets of at least twenty million Canadian dollars. It generates revenue of at least forty million Canadian dollars. It employs an average of at least two hundred and fifty employees.
Why the Act matters for supply chain governance
This legislation represents an important step in strengthening ethical standards across supply chains connected to Canada. It expands existing transparency requirements and reinforces earlier measures that restrict the import of goods produced using forced labour.
By introducing mandatory reporting and board oversight the Act signals that supply chain risks can no longer be ignored or treated as peripheral issues. Organizations are expected to actively identify labour risks and demonstrate how they address them in practice.
Key reporting areas organizations must address
Each report must provide a clear and structured explanation of how the organization manages forced and child labour risks. This includes an overview of organizational structure business activities and supply chains. It must describe policies and due diligence processes related to labour standards and explain how risk areas are identified and managed.
Organizations must also disclose any remediation steps taken where issues are found including measures to address income loss experienced by affected families. Training initiatives for employees should be outlined along with an explanation of how the organization evaluates the effectiveness of its actions.
Building ethical and resilient supply chains
The introduction of the Fighting Against Forced and Child Labour in Supply Chains Act marks a defining moment in Canada’s approach to responsible business conduct. It reflects a broader global trend toward stronger supply chain oversight and signals that passive compliance is no longer sufficient.
Organizations must now take a proactive approach by assessing labour risks implementing corrective actions and educating their workforce. These efforts support legal compliance while also strengthening trust with stakeholders and contributing to fairer global trade.
Many organizations are turning to technology to manage these growing responsibilities. Centralized platforms can support due diligence monitoring record keeping and reporting through advanced analytics and structured workflows. Capabilities such as intelligent monitoring comprehensive audit trails and secure storage of third party information help organizations respond efficiently to evolving regulatory demands.
By taking a strategic approach to supply chain governance businesses can meet the requirements of Canada’s modern slavery legislation and position themselves as responsible leaders in ethical commerce. Dess Digital supports organizations in navigating these expectations with clarity confidence and consistency.
