Beyond Disclosure: UK Modern Slavery Statement Penalties and Canada’s Forced Labor Due Diligence Shift

Puntos clave

Forced labor reporting is moving past disclosure in two countries at once, though neither the UK nor Canada has adopted a full due diligence duty yet.

• The UK’s Immigration and Asylum Bill 2026 adds financial penalties of up to the greater of £1 million or 1% of turnover for inadequate modern slavery statements, the first penalty regime since the Modern Slavery Act took effect in 2015 (House of Commons Library, 2026).
• Canada’s Global Affairs department and Labour Program closed a public consultation on August 21 asking whether forced labor reporting should become a due diligence duty backed by civil liability (Government of Canada, July 2026).
• The United States placed a 10% Section 301 tariff on Canadian goods in July, naming Canada among 60 trading partners it found were not effectively enforcing their own forced labor import bans, though goods already qualifying for duty-free treatment under the USMCA are exempt (Office of the United States Trade Representative, July 2026).
• Eleanor Lyons, the UK’s Independent Anti-Slavery Commissioner, has already published model legislation with fines of up to 5% of turnover, a considerably harder line than either government has taken so far (Independent Anti-Slavery Commissioner, December 2025 and July 2026).

What follows sets out what each government changed, what it left out, and what a defensible record needs to contain either way.

Your modern slavery statement may be on file, but that may not protect you much longer.

This summer, the United Kingdom and Canada each tested whether forced labor reporting still means anything once a statement carries no real consequence for what it leaves out. The UK answered first, with a Bill that fines organizations for saying too little. Canada is still deciding, five years into a debate about whether disclosure should carry the force of law.

Neither government went as far as campaigners wanted. Both went further than the status quo. What each one changed, and what each left alone, tells you more about where this is heading than either move does by itself.

What Does the UK’s Immigration and Asylum Bill Change for Modern Slavery Statements?

The Immigration and Asylum Bill 2026 inserts a new Schedule 4ZA into section 54 of the Modern Slavery Act, and it is the most consequential rewrite of that section since 2015. In-scope organizations will need to report against prescribed categories, including risk assessments, policies, due diligence processes, training, and effectiveness measures, under mandatory content standards and strict publication deadlines. Statements that fall short face financial penalties of up to the greater of £1 million or 1% of turnover, or 1% of budget for public authorities.

The Bill was introduced to Parliament on June 30 and passed its second reading on July 13 by a vote of 264 to 90. Organizations that sign a statement under the new regime will also need to declare it accurate to the best of their knowledge, a governance step the current regime asks of no one.

The Bill now moves into committee. The House of Commons Public Bill Committee is due to begin detailed scrutiny on September 10 and is expected to report by early November, which leaves the enforcement mechanics still open for amendment before the Bill reaches its later stages.

Why Has the UK’s Modern Slavery Regime Never Had Real Enforcement?

A Secretary of State injunction in the High Court is, to our knowledge, the only sanction the current regime has ever carried, and nobody appears to have used it. The 2019 Independent Review of the Modern Slavery Act ran to 80 recommendations across four themes for exactly that reason, most aimed at a system that let organizations satisfy section 54 while saying very little of substance.

The review recommended the mandatory categories that Schedule 4ZA now introduces, seven years later. That gap between what a statement said and what an organization did went unpoliced the whole time. Schedule 4ZA is the response.

Eleanor Lyons, the Independent Anti-Slavery Commissioner, still does not think it closes far enough. In a policy brief published in July, Lyons warned that the Bill’s silence on a due diligence duty leaves the UK having “fallen behind our international partners and is becoming a dumping ground for forced labour goods.” She had already published model legislation in December 2025 proposing a failure-to-prevent offense, a due diligence defense, an import ban on forced labor products, and fines of up to 5% of turnover for companies above a £36 million threshold.

Parliament did not take that path. The Bill in committee this autumn strengthens disclosure, not whether an organization had a duty to act on a risk before writing about it.

What Is Canada Asking in Its Forced Labor Reporting Consultations?

Two Canadian departments spent July and August asking businesses the same underlying question through two different doors. Global Affairs Canada and Employment and Social Development Canada opened parallel public consultations on July 27, with the Consulting with Canadians platform accepting comments through August 21.

One track, run with the Canada Border Services Agency, addresses how to identify goods suspected of being produced with forced labor under Bill C-35, including what importers of listed goods would need to provide on request. The other, run by the Labour Program, asks whether Canadian businesses operating abroad should carry a legal duty to identify, prevent, and remediate labor rights risks, with a specific question on civil liability attached to that duty.

The second track is the one worth watching. A reporting requirement tells a regulator what happened. A due diligence duty backed by civil liability tells a court who is responsible when it did not.

Why Does a Five-Year-Old Canadian Law Suddenly Carry More Weight?

Canada was not named for lacking a forced labor import ban. It was named for not enforcing the one it already has. In July, the United States imposed a 10% Section 301 tariff on Canadian goods, part of a broader action against 60 trading partners its Trade Representative found were not effectively enforcing their own bans on forced labor imports. Goods that already qualify for duty-free treatment under the USMCA are exempt, which narrows the tariff’s direct reach, but the finding behind it is the real signal. A consultation about enforcement gaps reads differently when your largest trading partner just tariffed you for one.

Canada has prohibited the import of goods made with forced labor under the Customs Tariff since July 2020, a commitment made under the Canada-United States-Mexico Agreement. The Fighting Against Forced Labour and Child Labour in Supply Chains Act followed on January 1, 2024, making Canada one of the first countries to require large companies to publicly report on their efforts against forced labor. That law stops at transparency, and its only real teeth are a fine of up to $250,000 for a company that simply fails to file.

None of this summer’s questions are new ones. A 2022 “What We Heard” report and a 2023 roundtable on due diligence legislation already tested most of what the current consultations are asking, which makes this closer to a fifth year of the same conversation than a first one. What changed this year is the audience listening to the answer, and that audience now includes a government weighing whether its own enforcement record just became a trade liability.

UK versus Canada: Current Requirements at a Glance

Is Due Diligence Becoming the Global Standard for Forced Labor Compliance?

Three other jurisdictions are answering a version of the same question with a firmer hand. Australia’s government announced in July that it intends to introduce a criminal offense for companies with more than AUD 100 million in revenue that fail to prevent modern slavery in their supply chains, backed by a reasonable-steps defense and civil penalties for weaker reporting. No legislation has been drafted yet, and the penalty structure remains open through consultation for the rest of the year.

The European Union is further along. Its Corporate Sustainability Due Diligence Directive is already adopted as a binding due diligence duty, and following this year’s Omnibus revision, member states now have a single deadline to transpose it, by July 26, 2028, with obligations reaching in-scope companies from July 26, 2029. The United States, through its Section 301 tariffs on those 60 trading partners, has started treating weak forced labor enforcement as a trade problem rather than only a disclosure one.

Set against that range, and against the broader patchwork of supplier compliance regulations third-party risk teams already track, the UK Bill and Canada’s consultations both read as a tightening of transparency rather than a move to the due diligence model already written into EU law. Whether that counts as caution or as a missed opportunity depends on which side of the debate is doing the counting.

Should Compliance Teams Revisit Their Forced Labor Programs Now?

None of this means the UK and Canada are converging on identical rules, or that either government has finished deciding what it wants. The UK’s secondary legislation, which will decide how the penalty regime operates once Schedule 4ZA takes effect, is still unpublished. Whether the extension of reporting duties to certain public authorities survives the UK’s committee stage, which begins September 10, is a separate question worth tracking on its own.

Canada’s answer depends on what its consultation responses turn into. If the Labour Program’s track becomes a bill with civil liability attached, Canada moves measurably closer to the EU’s model, helped along by a tariff dispute that gives the outcome more momentum than the previous four years produced. If it does not, this year’s consultation joins the 2022 report and the 2023 roundtable as another entry in a long record of asking the same question.

Either way, the underlying test is the same one regulators keep returning to: can you show what you did about a risk, not only that you wrote about it. If your program already answers that for your top-tier vendors, you are most of the way to wherever either government lands. If it relies on a supplier’s own statement without a way to verify it, you are standing in the same gap both governments spent this summer trying to close.

Cómo puede ayudar Mitratech

Getting a modern slavery statement or a forced labor disclosure right is only the first decision. Mitratech Prevalent gives third-party risk teams the vendor-level record, documented and monitored rather than self-reported, that a UK statement, a Canadian due diligence duty, or whatever comes after it will eventually ask you to produce. See the audit-ready record Prevalent builds.