Canada’s Modern Slavery Act: Reminder of the Upcoming 2025 Reporting Deadline

The Federal Government’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Modern Slavery Act”) imposes disclosure obligations on various Canadian and Canadian-linked entities. The purpose of this legal update is to remind entities that the next reporting deadline under the Modern Slavery Act is May 31, 2025.

This legal update constitutes the fifth installment in our series on the Modern Slavery Act. For background information, please see our prior updates from October 2022, September 2023, January 2024 and December 2024.

Background

The Modern Slavery Act, which came into force on January 1, 2024, requires certain Canadian and Canadian-linked entities to report by May 31^st of each year on their efforts to identify, prevent and mitigate risks of forced labour or child labour in their operations and supply chains. Failure to do so may result in substantial penalties, including fines of $250,000 per offence along with criminal prosecution.

The Modern Slavery Act has broad application and applies to any “entity” that produces, sells or distributes goods anywhere in the world, imports goods into Canada, or controls any entity that does any of the above. Under the Modern Slavery Act, an “entity” includes any company that: (i) is listed on a Canadian stock exchange; or (ii) has a place of business, does business or holds assets in Canada and meets certain asset, revenue or employee thresholds, as set out in our update from September 2023.

Each entity that meets the above test is obligated to comply with the Modern Slavery Act and must file a report by May 31, 2025 (an “Obligated Entity”). Obligated Entities that filed a report in 2024 are still required to submit a new report by May 31, 2025.

Preparation for the Upcoming Reporting Deadline

As the next reporting deadline is quickly approaching, Obligated Entities subject to reporting requirements under the Modern Slavery Act should begin the process of preparing their annual reports.

To meet the requirements under the Modern Slavery Act, annual reports must, among other things:

1. be approved by the Obligated Entity’s governing body. In the case of a joint annual report, the report must be approved by either the governing bodies of each Obligated Entity included in the report or the governing body of the Obligated Entity, if any, that controls each entity included in the report;
2. receive attestation using a prescribed format which sets out that the report was approved by the appropriate governing body or bodies and is signed by one or more members of each governing body that approved the report;
3. include accurate responses to a series of open and closed-ended questions that address each of the requirements under the Modern Slavery Act, including questions related to entity structure, internal policies, training and supply chain analysis; and
4. meet public disclosure obligations and language requirements.

Obligated Entities may also refer to guidance from Public Safety Canada, which was updated to address questions related to the annual reporting requirements posed during the initial 2024 reporting cycle, as summarized in our prior update from December 2024.

Conclusion

As Obligated Entities prepare for the next round of reporting under the Modern Slavery Act, now is the time to review obligations and verify that all required information has been gathered. As noted above, failure to file the annual report may attract substantial penalties, which, in addition to monetary fines and criminal prosecution of the Obligated Entity, may expose individual executives, directors and employees to liability. Such individuals may become liable if they directed, authorized, assented to, acquiesced in or participated in an offence under the Modern Slavery Act, regardless of whether the Obligated Entity is prosecuted or convicted. Timely and accurate reporting will be essential to mitigate these risks and avoid significant legal and financial consequences.

Should you require clarification with respect to any of the above or require assistance with Modern Slavery Act compliance, please do not hesitate to contact Peter Volk at [email protected] or Marcus Moore at [email protected]. The authors gratefully acknowledge the assistance of articling student Pavanpreet Ranu in the preparation of this update.

This update is intended as a summary only and should not be regarded or relied upon as advice to any specific client or regarding any specific situation.

If you would like further information regarding the issues discussed in this update or if you wish to discuss any aspect of this commentary, please feel free to contact us.