Corporate reporting and disclosure

Statutory and regulatory requirements

Are businesses in your jurisdiction subject to any statutory or regulatory human rights-related reporting or disclosure requirements?

Under Canadian securities laws, public companies must disclose all information, including information about environmental and social issues that are ‘material’ to an investor. The Toronto Stock Exchange and TSX Venture Exchange further require that ‘material information’ be immediately disclosed in accordance with their timely disclosure policies.

Canada is implementing procurement-related requirements for suppliers contracting with the Canadian federal government. The federal government is amending its procurement ineligibility and suspension policy to expand the list of convictions that can lead to debarment to include offences related to human trafficking of children and adults under Canada’s Criminal Code. All clothing and textile suppliers contracting with the federal government are required to self-certify that they conduct their business in accordance with fundamental human and labour rights, including freedom from child labour, forced labour, and discrimination and abuse.  The government has announced its intention to extend this certification requirement to all government suppliers (although it has not yet done so).

There is also growing political momentum in Canada to impose statutory reporting and compliance obligations on Canadian companies for modern slavery and human trafficking in supply chains. In response to recommendations made in a 2017 parliamentary study on child labour in supply chains, in July 2019, the government of Canada completed the first phase of its public consultation on possible future supply chain legislation and policy initiatives.  In October 2020, Bill S-216: An Act to enact the Modern Slavery Act and to amend the Customs Tariff was introduced in the Canadian Senate.  The proposed bill requires entities to report annually on measures taken to prevent and reduce the risk of forced labour or child labour at any step in the production of goods in Canada or elsewhere.

What is the nature and extent of the required reporting or disclosure?

Aside from environmental and social matters determined to be ‘material’, Canadian securities regulators have not specifically mandated the disclosure of environmental and social issues in a reporting issuer’s public disclosure record. Certain industry associations, such as the Mining Association of Canada, require members to report on their CSR performance.

Canada’s transparency reporting legislation, the Extractive Sector Transparency Measures Act (ESTMA), imposes mandatory reporting obligations on oil, gas and mining companies. Quebec has similar legislation: the Act Respecting Transparency Measures in the Mining, Oil and Gas Industries. Under ESTMA, all reporting companies are required to report on an annual basis all payments made to governments in Canada and abroad, including Aboriginal governments, and state-owned entities where the payments are made in relation to the commercial development of oil, gas or minerals and the payment amount is C$100,000 or more to a single payee.

Which bodies enforce these requirements, and what is the extent of their powers?

Canadian securities regulators are responsible for enforcing disclosure requirements imposed on securities issuers.

The federal department, Natural Resources Canada, administers the ESTMA, and in cases of wilful non-compliance, may recommend prosecution to the Director of Public Prosecutions. If the entity is found guilty, ESTMA provides for fines of up to C$250,000 per day per offence.

Voluntary standards

What voluntary standards should businesses refer to for guidance on best practice in relation to any applicable human rights-related corporate reporting and disclosure regimes?

As part of its CSR Strategy, the government of Canada has specifically endorsed the Global Reporting Initiative (GRI) international reporting standard. However, in the absence of statutory requirements, Canadian companies are able to choose a reporting framework that best enables them to meet the information demands of their stakeholders and any reporting obligations mandated by law, policy or membership with an industry association.

Corporate due diligence

Statutory and regulatory requirements

Are businesses in your jurisdiction subject to any statutory or regulatory human rights-related due diligence requirements?

There are no express statutory obligations in Canada requiring businesses to engage in corporate due diligence in respect of human rights matters.

What is the nature and extent of the required due diligence?

Not applicable.

Which bodies enforce these requirements, and what is the extent of their powers?

Not applicable.

What voluntary standards should businesses refer to for guidance on best practice in relation to any applicable human-rights related corporate due diligence regimes?

Canadian businesses may choose to align with a number of different voluntary international regimes that promote or require human rights-related due diligence activities, including:

  • the UNGPs;
  • the Voluntary Principles for Security and Human Rights;
  • the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises; and
  • the OECD Due Diligence Guidance for Responsible Business Conduct.

 

Canada is the home jurisdiction of a number of businesses that are internationally active in mining, energy and other extractive industries. As a result, a number of sector-specific voluntary regimes that emphasise human rights-related due diligence are applicable to Canadian businesses, including:

  • the Mining Association of Canada’s Towards Sustainable Mining (TSM) initiative;
  • the International Council on Mining and Metals’ performance expectations; and
  • the World Gold Council Responsible Gold Mining Principles Assurance Framework.

Law stated date

Correct as of

Give the date on which the information above is accurate.

January 2020.

Voluntary regimes and best practices

What best practices should businesses consider when implementing policies to ensure compliance with human rights-related reporting or disclosure requirements?

Businesses should implement policies in line with international standards for responsible business conduct, including those endorsed by the government of Canada in Canada’s CSR Strategy for the Extractive Sector Abroad, which includes the GRI framework for sustainability reporting.

Public companies should ensure that they are able to meet their mandatory securities filing requirements for the disclosure of material environmental and social issues while also meeting the information demands of their stakeholders, including investors that are increasingly seeking environmental, social and corporate governance information beyond environmental and social factors that would be considered material by securities regulators.

Where domestic and international industry organisations have established standards, best practices or reporting requirements for their members, businesses should ensure that they meet these expectations.

Remedies

What best practices should businesses consider when implementing policies to ensure compliance with due diligence requirements?

Businesses should consider implementing human rights-related due diligence policies that are in line with international standards for responsible business conduct endorsed by the government of Canada, including the OECD Due Diligence Guidance for Responsible Business Conduct.

In addition, Canadian businesses that have potential exposure to human rights risks, whether through their supply chains or because they operate in extractive industries, should consider membership in initiatives or programmes that provide guidance on corporate human rights due diligence practices.

Where domestic and international industry organisations have established corporate due diligence standards relating to human rights for their members, Canadian businesses that are members should ensure that they meet these expectations.