SMEs and human rights: bridging the accountability gap in the economy’s backbone. Navigating Canadian and global human-rights duties for local and supply-chain SMEs

Abstract

In Canada, small and medium-sized enterprises or SMEs are the backbone of Canada’s economy. SMEs’ contribution to human right accountability is still not investigated enough. These companies usually work under an “accountability gap," which means they don't have the awareness, knowledge and regulatory pressure to apply human rights due diligence ((HRDD), whereas large firms are subject to increased scrutiny under business and human rights (BHR) frameworks. This thesis looks at how corporate culture, policy, and enforcement affect Canadian SMEs' compliance with human rights obligations and why they stay behind in HRDD implementation. The study examines the gap between HRDD trends worldwide and SME reality in Canada, drawing on academic frameworks such as Political CSR, Institutional Theory, and Stakeholder Legitimacy. It highlights the main obstacles, a lack of state-led direction, supply-chain power disparities, and regulatory fragmentation, using a mixed-methods approach that includes case studies, interviews, and cross-sectoral analysis. The results show that SMEs react differently to human rights standards, depending on internal ethics or external constraints (such as domestic inspections or international sanctions). The study's policy propose, long-term reform would introduce tiered, risk-based HRDD duties and a single “one-front-door” support centre that integrates provincial employment-standards advice with federal supply-chain expertise.By bridging the accountability gap, Canada can align its SME sector with emerging global standards while safeguarding its economic resilience.