Canada’s modern slavery reporting regime may be moving towards more substantive obligations. 

The Fighting Against Forced Labour and Child Labour in Supply Chains Act (often referred to as the Modern Slavery Act) currently requires certain businesses to report annually on forced labour and child labour risks in their operations and supply chains, and on any related actions they have taken. It does not, however, impose a due diligence obligation. Entities can comply with the legislation even if they have not yet taken specific steps to identify or address such risks.

That may change. The federal government recently consulted on potential due diligence requirements for certain Canadian businesses to identify, prevent, address and remediate labour exploitation risks in their operations and supply chains. The consultation also considered potential civil liability for non-compliance. While no legislation has been introduced, the consultation suggests that the direction appears to be moving towards a more robust regulatory framework.

Government expectations are also evolving. Although Canada’s legislation does not require entities to set specific forced labour- and child labour-related goals or make year-over-year improvements, current guidance encourages reporting entities to create short-, medium- and long-term goals and demonstrate progress towards such goals.

For businesses with a December 31 year-end, this fall is a good time to consider whether their 2026 activities will support a stronger report when the next filing is due on May 31, 2027. This may include:

• reviewing progress on previously identified goals or initiatives;
• evaluating policies and supplier management practices; and 
• providing targeted employee education or training.