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Modern Slavery in Canada and its Impact on the Global Supply Chain

By Avetta Marketing
February 17, 2021
4 minutes
Modern slavery poses a great threat to both humanity and the global supply chain

Modern slavery poses a great threat to both humanity and the global supply chain, and the Canadian nation is making new strides to address it. In February 2020, the Canadian Supreme Court finally released a judgment, Nevsun Resources, that could speed up the country’s journey towards ending modern slavery practices.

According to the Global Slavery Index, in 2016 there were around 17,000 people subjected to modern slavery practices in Canada. Common forms of modern slavery in Canada include:

  • Forced sexual exploitation of adults and children
  • Forced labor
  • Forced marriage

The Nevsun Resources judgment marks a significant milestone in Canada’s battle against modern slavery practices, but it is an exception to the country’s long history of ineffective legislation. With the Nevsun Resources ruling, Canadian companies can now be tried on home soil for human rights violations committed overseas. Before this ruling, companies accused of modern slavery practices were only held accountable under foreign jurisdiction.

This judgment comes at a vital time as more consumers are demanding more visibility from Canadian firms operating abroad, but the most impactful milestone to come in recent years is the introduction of Senate Bill S-211, or once passed, the Modern Slavery Act.

What is the Modern Slavery Act in Canada?

The bill covers both child labor and forced labor. Child labor is defined as labor by persons under the age of 18 years. Forced labor is defined as labor provided by a person under circumstances that threatens their safety. The bill includes an amendment that prohibits the import of forced labor and child labor-made goods in the country.

The Modern Slavery Act will apply to businesses that:

  • Has a place of business or assets in Canada or control such a business
  • Generates at least CAD 40 million in revenue
  • Imports goods into Canada
  • Is listed on a Canadian stock exchange
  • Possesses at least CAD 20 million in assets
  • Produces or sells goods in Canada

To ensure companies are abiding the law, the bill requires businesses that fall under its scope to provide the federal government with an annual modern slavery report. Most importantly, the report will need to clearly establish the steps the business is taking to reduce and prevent the risk of modern slavery practices in its operations and supply chains. Failure to submit the report could result in a fine of up to CAD 250,000.

How Can Companies Stay Prepared to Combat Modern Slavery in Canada?

  1. Asses the risks associated with forced labor: To implement an effective risk assessment program, companies should identify various critical risk areas, plan accordingly, and create a robust supply chain strategy.
  2. Audit overseas suppliers: Companies should revied suppliers’ ethical and human rights practices—the criteria of the audit need to cover health and safety, rates of injury, and contraction of diseases through occupation.
  3. Prequalifying contractors: Establish a thorough prequalification framework for suppliers and contractors.

Avetta is a member of the United Nations Global Compact and embraces the Ten Principles that address human rights, ethical labor, environmental concerns, and anti-corruption. By leveraging Avetta’s supply chain risk management solutions, businesses can obtain a detailed analysis of outputs focusing on ethical and transparent business practices—helping eradicate modern slavery from their supply chain while also creating a healthier workplace.

To learn more about Avetta's risk management service, call 844-633-3801, or email [email protected].

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