The Impact of Mandatory Human Rights and Environmental Due Diligence (mHREDD) on Canadian Competitiveness

Abstract

This report analyzes the impact of mandatory Human Rights and Environmental Due Diligence (mHREDD) on Canadian competitiveness through a systematic review of academic and policy literature. It finds limited direct empirical evidence but identifies key mechanisms shaping competitiveness, including compliance costs, supply-chain restructuring, regulatory fragmentation, and governance design. Evidence suggests no systematic negative effects on firm profitability, while benefits include improved market access, investor confidence, and supply-chain resilience. Impacts are highly design-dependent, with leaders gaining advantages and smaller firms facing higher burdens. Overall, aligning Canada with global mHREDD regimes may enhance its position as a trusted and competitive trading partner.