Unlike its European counterparts, Canada appears to remain firmly entrenched in a soft approach to ensuring that Canadian extractive companies respect human rights abroad. Canada’s powerful extractive industry has been very successful in resisting attempts to introduce hard law measures to regulate their transnational conduct. This article considers business and state motivations for supporting or pursuing the shift to hard law measures in the business and human rights context. It assesses Canada’s 2022 policy on responsible business conduct and the implications of the government’s failure to endow the Canadian Ombudsperson for Responsible Enterprise with the necessary powers to engage in credible independent investigations of transnational business conduct. It also considers the potential impact of three leading cases brought in Canadian courts against Canadian extractive companies in relation to their overseas operations. The article argues that these developments may not yet be sufficient on their own to shift extractive sector views on the introduction of domestic human rights due diligence legislation. It concludes with some thoughts on the impact that the legislative developments in Europe and treaty negotiations at the United Nations may have in Canada.

In February 2020, the Supreme Court of Canada rendered a decision—Nevsun Resources Ltd. v. Araya, 2020 SCC 5—that can properly be described as revolutionary. In Nevsun, the court found that a Canadian corporation operating in a host state, Eretria, could be liable under Canadian domestic law for human rights abuses committed in Eritrea under customary international law, as incorporated into Canadian domestic law. The decision merits special attention because it is likely to fundamentally change the relationship between foreign investors, host states and the residents of host states adversely affected by investors’ unlawful conduct which amount to modern slavery.