US anti-EDI measures encounter resistance from Canadian firms
In recent times, a significant shift has been observed in the Equity, Diversity, and Inclusion (EDI) programs of major U.S. companies. Companies like Walmart, Google, Amazon, McDonald's, and Victoria's Secret have not completely abandoned their EDI initiatives but are scaling back or reframing them in response to political, legal, and social pressures.
Tina Pranjic, an expert in human resources, notes that the current economic situation is leading many companies to "freeze or delay their budgets" for human resources, including EDI programs. This trend intensified after the 2023 U.S. Supreme Court decision outlawing affirmative action in higher education and was further accelerated by political changes such as President Trump's 2024 reelection and a 2025 executive order targeting private sector DEI efforts.
The reasons for this rollback include anticipation of political backlash and regulatory scrutiny, executive orders pressuring agencies and private companies to rescind or limit DEI initiatives, pressure from segments of the market that oppose affirmative action and similar policies, and movement framed by some companies as "corporate prudence" or risk management.
Consequences of abandoning or reducing DEI programs include declining employee morale and sense of inclusion, which harms engagement and retention of diverse talent. Reports of increased workplace discrimination or bias incidents have been reported in companies that have eliminated DEI programs. Significant reputational damage and loss of market value from consumer boycotts, as seen with Target's 2025 boycott causing a 6.8% drop in store traffic and a $19 billion loss in market capitalization, are also potential outcomes.
Regarding U.S. companies' Canadian subsidiaries, while specific impacts are less reported, the pattern suggests that they may face challenges aligning with U.S. parent companies if the latter reduce DEI commitments. Canadian employment law and social expectations tend to maintain strong anti-discrimination and inclusion standards. Companies with U.S. roots operating in Canada likely need to balance evolving U.S. DEI strategies with Canadian legal obligations and cultural expectations on diversity and equity.
Despite the rollback, Victoria's Secret remains committed to inclusion and belonging. Walmart Canada wants to develop a workplace where everyone is included. Interestingly, 95% of Canadian executives surveyed by Élan want to maintain or strengthen their EDI efforts.
In contrast, Tania Saba, a university professor, states that when parent companies suspend their programs, it has effects on all subsidiaries. The Montreal Pride festival is seeing a decrease in company registrations for the parade, with some partners withdrawing due to economic constraints. Pride Toronto reported the withdrawal of some major sponsors, representing the loss of several hundred thousand dollars in support. Quebec-based firms that advise businesses observed a period of uncertainty and reflection among their clients, particularly those in the U.S. market.
Simon Gamache, Montreal Pride's general director, notes that Quebec is often the last to feel the effects of these things, but he is concerned about the trend of losing partners. The economic uncertainty is causing some companies to freeze or delay their budgets for human resources, including EDI programs.
In conclusion, while major U.S. firms are reframing or scaling back their EDI programs largely due to political/legal pressures and backlash culture, the impact on their Canadian subsidiaries is complex, requiring balancing U.S. corporate policy shifts with Canadian legal and societal norms around inclusion.
- Political changes such as President Trump's 2024 reelection and a 2025 executive order targeting private sector DEI efforts have influenced the financial decision-making of companies, leading to the freezing or delaying of EDI program budgets.
- The rollback of DEI programs in major U.S. companies can have significant consequences in the business realm, including declining employee morale, potential workplace discrimination incidents, and reputational damage, as evidenced by Target's $19 billion loss in market capitalization following a consumer boycott.
