Canadian legislative and policy initiatives

The Canadian government is engaged on BHR issues related to the activities of Canadian corporations operating overseas. Canada’s approach to business and human rights is rapidly evolving, reflecting domestic and international developments.

Canada’s approach to BHR involves a mixture of law and policy. The Canadian government has not yet published a national action plan on BHR. Much government policy in this area has focused on Canada’s extractive sector. This focus recently expanded to the apparel and textile industries, and all sectors of the economy with global operations and supply chains.

Canadian initiatives have focused on Canada's dual responsibilities under the UNGPs: ensuring Canadian businesses respect human rights throughout their operations; and establishing dispute-resolution processes to remedy business-related human rights abuses.

To date, Canada has taken limited action to codify its policy expectations in legislation. In recent years, bills on BHR issues have been tabled in the House of Commons and the Senate. Canada is the first jurisdiction to appoint an Ombudsperson to investigate claims of human rights abuses through Canadian corporate activity overseas.

i) Responsible business conduct

The government’s policy expectations for Canadian companies operating globally is currently formulated under the term “responsible business conduct” (RBC). It operates under the direction of Global Affairs Canada.

Companies are expected to operate in an economically, socially and environmentally sustainable manner, consistent with global best practices as articulated in internationally recognized guidelines, including the UNGPs.

Canada’s RBC strategy builds on earlier government efforts focused on the global operations of the Canadian extractive sector. The government’s first Corporate Social Responsibility (CSR) Strategy was launched in 2009. That strategy took up many recommendations made by the National Roundtables on Corporate Social Responsibility, a series of national, multi-stakeholder consultations led by the government in response to a 2005 report on Mining in Developing Countries and Corporate Social Responsibility by a subcommittee of the House of Commons Standing Committee on Foreign Affairs and International Trade. Canada’s 2009 CSR Strategy was replaced in 2014 with an “enhanced” CSR Strategy: Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Mining Sector Abroad. The government’s RBC strategy is currently under review. A recent public consultation on these issues closed in October 2020.

Canada’s RBC strategy links trade-related government advocacy support for companies operating overseas with whether those companies are meeting or exceeding internationally recognized standards including the UNGPs.

Under the strategy, trade-related government support can be withdrawn if:

  • a company fails to meet the standards; and/or
  • a company refuses to engage in non-judicial dispute resolution processes, which are discussed in the Disputes section.

In addition, trade-related government support may be denied to any Canadian company operating globally or with global supply chains in any sector that fails to meet the RBC expectations or requirements.

The RBC strategy relies on an Ombudsperson to recommend when Canadian companies should be penalized for failing to adhere to any RBC expectations.

Canadian ombudsperson for responsible enterprise

In April 2019, the federal government appointed a Canadian Ombudsperson for Responsible Enterprise (CORE). The CORE’s mandate is to investigate allegations of human rights abuses associated with Canadian corporations operating abroad through independent and collaborative fact-finding. The CORE is also mandated to make recommendations for resolving disputes. These recommendations can be issued to the parties in the dispute or to the federal government. For example, if a Canadian company fails to act in good faith during the review process, the Ombudsperson may recommend to the Minister that trade measures be taken, including the withdrawal of advocacy support and cessation of future Export Development Canada financial support. The CORE is also responsible for monitoring the implementation of recommendations.

The CORE’s operating procedures can be accessed on CORE’s website.

The CORE forms part of Canada's initiative to provide a state-based, non-judicial access to remedy under UNGP Pillar 3. However, like its predecessor the CSR Counsellor, it has not yet played an active role in settling disputes between Canadian businesses and victims of rights violations.

Multi-stakeholder advisory body on responsible business conduct

A Multi-stakeholder Advisory Body on Responsible Business Conduct (MSAB) was created alongside the CORE to further develop Canada’s RBC strategy and issue recommendations to the government. The MSAB is made up of members of industry, non-governmental organizations and academia. In July 2019, the civil society and labour union representatives on the MSAB resigned, citing a loss of confidence in the government’s commitment to corporate accountability abroad. The MSAB has not reconvened since.

ii) Canadian Implementation of UN Arms Trade Treaty

Canadian companies engaged in international trade in defence goods or defence technology, either directly or indirectly, are subject to export controls to help protect against the serious adverse human rights impacts of illicit cross-border arms flows. This is a result of Canada becoming a state party to the United Nations Arms Trade Treaty (ATT). In 2018, Canada enacted legislation to amend the Export and Import Permits Act (S.C. 2018, c. 26) to meet its ATT obligation. This is the first Canadian legislation that expressly incorporates factors related to human rights, peace and security, and development into Canada’s import/export control framework.

A core component of Canada’s commitment under the ATT is to ensure export permits are not granted where there is a “substantial risk” that granting the permit will contribute to:

  1. undermining of peace and security;
  2. a serious violation of international humanitarian law or international human rights law;
  3. an offence under international conventions or protocols relating to terrorism or transnational organized crime to which Canada is a party; or
  4. serious acts of gender-based violence or serious acts of violence against women and children.

Where a “substantial risk” of adverse human rights impacts cannot be mitigated, the Minister of Foreign Affairs must deny the permit application.

iii) Procurement apparel initiative; EDC human rights policy

The Government of Canada has taken steps, and is considering further steps, to incorporate its BHR expectations into federal procurement policy and decision-making processes of government agencies, specifically Canada’s export credit agency, Export Development Canada (EDC).

Procurement apparel initiative

The government’s apparel initiative is a self-certification requirement for federal clothing and textile procurement. Canada’s Policy on the Ethical Procurement of Apparel supports ethical sourcing throughout Canada’s procurement supply chains.

Since September 2018, suppliers contracting with the Canadian government are required to self-certify that they and their direct Canadian and foreign suppliers are adhering to eight fundamental human and labour rights in the International Labour Organization (ILO) Conventions binding on member states. These rights include freedom from child labour, forced labour, abuse and harassment, discrimination; access to fair wages and safe working conditions; and freedom of association and collective bargaining. Since the launch of this policy in 2018, all new apparel procurement contracts entered into with the Government of Canada include the ethical procurement certification.

EDC - Human Rights Policy

EDC put into place a stand-alone Human Rights Policy effective May 1, 2019 supported by its Due Diligence Framework on Human Rights, which sets out EDC’s approach to identifying and addressing the human rights impacts of its customers’ operations.

EDC’s policy commits it to “use any available leverage to influence our customers’ actions to prevent and mitigate their human rights impacts.” It will also work to increase its leverage if it cannot influence companies to prevent and mitigate adverse human rights impacts.

EDC’s policy does not predicate financial support on companies’ adherence to the UNGPs or cooperation with the CORE. However, EDC will encourage companies to cooperate with the National Contact Point (NCP) for the resolution of disputes related to the OECD Guidelines for Multinational Enterprises. For more information on the NCP see Non-Judicial Dispute Mechanisms Section) and CORE. EDC will itself take reasonable steps to cooperate with these non-judicial grievance processes. In addition, in December 2020, EDC’s executive management team approved its Principles on Leverage and Remedy which, among other things, expressly links human rights considerations to EDC’s decision-making process on which transactions, relationships and projects it will take on. 

Since 2007, EDC has also been a signatory to the Equator Principles, an international financial industry benchmark for determining, assessing and managing environmental and social risk in project financing, aligned with the International Finance Corporation’s (IFC) Performance Standards on Social and Environmental Sustainability. The latest iteration of the Equator Principles – EP4 – requires signatories to carry out human rights impact assessments for every financed project in accordance with the UNGPs regardless of whether the risk merits a full Environmental and Social Impact Assessment.