The Canadian Modern Slavery Act (CMSA) is new legislation that requires companies to mitigate the risks of forced labor and human trafficking in their global supply chains.
The CMSA applies to any entity—including corporations, trusts, partnerships or other unincorporated organizations—listed on a Canadian stock exchange, have a place of business, do business or have assets in Canada. Affected companies must also meet at least two of the following conditions for at least one of their two most recent financial years:
- Have at least $20 million in assets
- Generated at least $40 million in revenue
- Employed an average of at least 250 employees
Although the CMSA imposes a new administrative burden on companies, it also allows them to assess their supply chain risk from a broader perspective. By complying with the CMSA, companies gain greater transparency into their supply chains, which can simultaneously facilitate addressing similar legislation globally, assist in addressing supply chain sustainability issues, mitigate reputational risks and enhance organizational resilience.