The Business and Human Rights Landscape in Canada: Evolution in an Age of Uncertainty
Like most nations in the global community, Canada is experiencing the uncertainty and vulnerability brought forth by recent significant geopolitical and geoeconomic shifts, which have also fundamentally changed its political and social discourse domestically. The influences of these shifts were reflected in the most recent federal election in Canada, held on 28 April 2025. A Liberal Party that had been governing for ten years overcame a seemingly insurmountable unpopularity compared to a front-running Conservative Party to form a Liberal minority government (again). Largely seen as motivated by negative sentiment towards Trump administration 2.0's priorities and actions, and as a referendum on which party leader was best able to deal the threats of an uncertain world, Prime Minister Mark Carney and his new government will now face enormous challenges.
Economic fears of looming recession propelled by inflation, tariffs, supply-chain disruption and global investment uncertainty are testing, if not the commitment, then the pace of progress toward a sustainable economy. These domestic and international concerns will have implications for the ongoing evolution of business and human rights in Canada.
Canada's historical approach to business and human rights (and corporate social responsibility)
Canada's approach to business and human rights has always been heavily influenced by international developments, the activities of its strategic trading partners, and the evolving expectations of stakeholders and the Canadian public.
Canada's legal framework is also continuously evolving as a mix of law and policy, with increasing pressure to pursue legislative initiatives to promote supply chain transparency and due diligence to mitigate and prevent the risk of the use of forced labour and child labour in supply chains. At the same time, growing demands for the imposition and enforcement of import bans in order to combat forced labour in the making of goods are underscoring the imperative of human rights due diligence for businesses.
Canada was considered an early mover in corporate social responsibility (CSR), proceeding first with "soft law" initiatives – largely focused on Canada's extractive sector – that required Canadian companies to respect human rights abroad. The government's first CSR strategy was launched in 2009 and replaced in 2014 with an "enhanced" CSR strategy, entitled "Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada's Mining Sector Abroad". Between these iterations of government strategy, the United Nations (UN) Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (the "UNGPS") as a foundational transformation in the expectations on international business. After this early "soft law" progress, Canada was seen as lagging behind other jurisdictions (including the EU) in pursuing "hard law" legislative initiatives, particularly those related to addressing forced labour in global supply chains.
And now, most recently, the Canadian government has passed its first legislation in this area, with the coming into force of the Fighting Against Forced Labour and Child Labour in Supply Chains Act. The Canadian government has also committed to introducing mandatory human rights due diligence legislation modelled on similar legislation in other jurisdictions, including the EU.
Canada's approach to business and human rights moving forward
The coming into force of Canada's supply chain transparency legislation, as well as the promise of still more legislation targeting supply chains, appear to mark a shift towards the implementation of domestic legislation to support Canada meeting its obligations under the UNGPs, in line with global developments. This move was foreshadowed by the current, overarching federal government strategy for responsible business conduct, entitled "Responsible Business Conduct Abroad: Canada's strategy for the Future", which centres due diligence in Canada's approach to responsible business enterprise and commits the government to enacting legislation to "...eradicate forced labour from Canadian supply chains and ensure that Canadian businesses operating abroad do not contribute to human rights abuses".
With a newly elected minority Liberal government, the progress of certain business and human rights initiatives (including legislative initiatives) is again uncertain and now against a backdrop of shifting political and geopolitical winds and increased emphasis on enhancing Canadian economic competitiveness, national security, and sovereignty. Canada will continue to be strongly influenced by its strategic partners, including the EU. International trading dynamics will influence developments in the enforcement of Canada's import ban on goods manufactured in whole or part using forced labour, consistent with its obligations under the Canada-United States-Mexico Agreement (CUSMA).
Specific areas of government focus in the ongoing evolution of business and human rights in Canada
Mandatory human rights due diligence
The newly elected federal government will continue to consider the implementation of mandatory human rights due diligence legislation, strongly influenced by the EU and particularly the EU Corporate Sustainability Due Diligence Directive (CSDDD). With the EU possibly pulling back on its expectations on businesses under the CSDDD through the EC's Omnibus Simplification Package, Canada's progress may slow as it also considers the final EU approach taken.
In the absence of forward progress by the Canadian government in the near-to-mid term, mandatory human rights due diligence legislation may be advanced by way of a Senate public bill or a private members' bill in the House of Commons. During the past several years, there have been several attempts to advance business and human rights-related legislative initiatives through Senate and private members' bills in the House of Commons. A Senate public bill can successfully become law – as demonstrated recently with Canada's supply chain transparency legislation, which started as a Senate public bill and ultimately obtained Royal Assent, coming into force on 1 January 2024.
Such legislative initiatives can act as an impetus for the government to move forward more quickly with its own legislative initiative, particularly where there is sufficient political support and pressure from the stakeholder community. A key feature of business and human rights has been the coalescence of a broad range of stakeholders around business and human rights principles.
Measures to strengthen enforcement of import banb
With the impending CUSMA negotiations and informed by the recent 2024 consultations undertaken by the Canadian government on Canada's import ban, there will be pressure on Canada to follow through with measures to strengthen its ban on imports of goods manufactured in whole or in part using forced labour. One of the measures under consideration is the implementation of a reverse onus on the importer regarding "goods at risk" for forced labour; this would require the importer to rebut the presumption that the "goods at risk" were made using forced labour. Such a rebuttable presumption would likely be modelled on the US precedent under the Uyghur Forced Labor Prevention Act and would significantly expand Canada's forced labour regime and the due diligence and supply chain traceability requirements for businesses.
Canada may also be influenced by the import ban in the EU. EU Regulation 2024/3015, which will be applicable as of 14 December 2027, prohibits economic operators from placing or making available on the EU market – or exporting from it – any products made using forced labour. Although the EC will establish a database on forced labour to identify risks based on specific geographic areas or with regard to specific products or product groups, the EU regulation does not create a reverse onus for "goods at risk" based on country of origin or nature of the goods. Of note, the EU regulation encourages co-operation with other countries, which remains critical to addressing forced labour in complex supply chains and may help mitigate against jurisdictional divergence on compliance and enforcement.
As Canada considers measures to strengthen its import ban and step up enforcement, there will be increased pressure on businesses that have not already done so to undertake and document due diligence in relation to forced labour and child labour, in line with the expectations of the UNGPs – even in the absence of mandatory human rights due diligence legislation in Canada.
Federal procurement policy
Government procurement policy is another avenue Canada is increasingly using to encourage businesses to embed human rights due diligence in business practices. The Canadian federal government's central purchaser, Public Services and Procurement Canada (PSPC), has taken several steps to embed human rights expectations on its suppliers into its agreements, including standing offers and supply arrangements and service contracts.
To further embed human rights expectations into its procurement policies and processes in a more comprehensive and consistent manner, the PSPC is planning to implement in 2025 a departmental policy on ethical procurement. This will form the basis for the PSPC's ethical procurement initiatives, training programmes, and tools for suppliers. A human rights due diligence framework with specific guidance for suppliers is also under development by PSPC.
Canadian Ombudsperson for Responsible Enterprise (CORE)
The CORE, as an example of a state-based nonjudicial mechanism, has been both promoted both as a source of timely and effective resolution and remedy and criticised for failing to live up to its stated promise.
The third pillar of the UNGPs provides that there must be effective remedies for business-related human rights harms, consistent with international human rights law. The UNGPs contemplate a landscape of state-based, judicial and nonjudicial processes forming the foundation of a wider system of remedy that also includes nonState-based company and multi-stakeholder grievance mechanisms.
When the CORE was first announced in 2018, replacing the previous CSR counsellor, it was advanced as an important forum for the mediation and resolution of disputes related to allegations of human rights abuses brought against Canadian companies operating globally, consistent with the expectations of the UNGPs. The CORE was designed to provide effective and timely remedy, be less costly and time-consuming than judicial processes, and be capable of crafting more tailored appropriate remedies beyond simply ordering the payment of monetary damages.
From the outset, there was controversy focused largely on the powers of the CORE but also on its scope. Does the CORE – as a state-based, non-judicial mechanism – require the power to compel documents and witnesses to fulfil its mandate to address allegations of human rights abuses brought against Canadian companies operating globally? A 2021 report on the CORE's mandate by the Standing Committee on Foreign Affairs and International Development recommended that the Canadian government appoint the CORE as a commissioner pursuant to Part I of Canada's Inquiries Act, with the appointment remaining in place until legislation endowing the CORE with the power to compel witnesses and documents has been adopted by the Canadian Parliament.
While there have been persistent calls for enhancing the powers of the CORE, others have cautioned that these powers will be accompanied by more complex procedural protections – making the process more adversarial, lengthier and costlier and, in effect, reducing the CORE's capacity to operate as an accessible and costeffective non-judicial mechanism for remedy.
The second, persisting question is when (and how) the scope of the CORE will be expanded. When first established, the CORE was limited to the oil and gas, extractive and garment industries – with an undertaking from the Canadian government to extend the scope to other sectors after the first year of operation. To date, this expansion has not occurred.
The CORE post is now vacant while the Canadian government completes a review of the CORE's mandate. The results of this review are anticipated in 2025 and will provide stakeholders with a better sense of the Canadian government's approach to non-judicial remedy going forward.
State-based judicial remedy
The right to an effective remedy for victims of human rights abuses is a fundamental human right that is enshrined in core human rights treaties ratified by Canada. In this context, there has been an ongoing question as to the role of Canadian courts in considering judicially corporate civil liability claims related to human rights abuses committed outside Canada by foreign actors, including the foreign subsidiaries of Canadian companies.
Canadian courts have opened the door to such claims and these decisions – albeit preliminary decisions with a low bar for proceeding to trial – have changed the landscape of potential liability for Canadian companies with operations overseas. These cases have also highlighted the importance of taking seriously the corporate obligation to respect human rights as delineated and operationalised by the UNGPs. It remains to be seen the extent to which Canadian courts are willing to extend corporate liability to international business activities.
Outlook
Internationally, the increase in business and human rights-related regulation has led to a period of "blow back", owing to perceived risks to the competitiveness of businesses that are navigating uncertain trading and geoeconomic forces. Still, belief in the imperatives of sustainability and enduring international commitments to business and human rights remains strong in Canada and globally. It is unlikely that the concrete, intersecting business and human rightsrelated initiatives currently in play in Canada, the EU and elsewhere will be abandoned.
International trading pressures may possibly also serve as a driver of human rights due diligence, even if there is some loss of momentum in the near term with regard to legislative initiatives requiring mandatory human rights due diligence. The anticipated increase in enforcement of Canada's import ban on goods from forced and child labour will require businesses to more proactively manage their exposure to human rights due diligence investigations and compliance.
Originally published by Chambers Global 2025 Practice Guide: Business & Human Rights
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