Foreign Affairs Minister Stéphane Dion is rejecting an all-party effort to enact an American-style Magnitsky Act, which freezes assets and bans visas of Russian human-rights violators.
The move has caused a rift within the Liberal caucus and among influential Liberals, who say Mr. Dion is reneging on the Liberal Party campaign pledge to adopt such a law and casts doubt on the government's commitment to uphold human rights.
Last year the House of Commons unanimously passed a motion by former Liberal justice minister Irwin Cotler calling on Parliament to adopt a Canadian version of the United States's Magnitsky Act.
"The position of the party was clear during the election campaign. I certainly hope that this legislation does get passed during this coming parliamentary system," Liberal MP Borys Wrzesnewskyj said Thursday. "Russia at its core is a kleptocracy and it is unacceptable that those individuals who have blood on their hands … can come to the West to benefit."
But Mr. Dion said the government no longer feels honour-bound by the election promise, arguing current laws are adequate to deal with human-rights abuses.
"I note that we are able to stop the perpetrators of this crime with the current Immigration and Refugee Protection Act, because it is checking the eligibility at the border. We have this capacity," he told the Commons.
A senior government official told The Globe and Mail that a Canadian Magnitsky Act was a "bad idea" and Mr. Dion did not want to antagonize the Putin regime as he undertakes efforts to re-open a dialogue with the Kremlin. Relations hit a diplomatic low after President Vladimir Putin annexed Crimea in 2014.
The official said adopting a new raft of Magnitsky-style sanctions could hurt Canadian companies wanting to do business in Russia.
Former Liberal Party interim leader Bob Rae said Mr. Dion should not sacrifice principles to appease Mr. Putin and other regimes that violate human rights.
"The decision by the government to re-engage with Russia and Iran and other countries should never mean that we lower our own standards with respect to conduct by individuals who are working in those systems," Mr. Rae told The Globe. "I don't think anything is gained if you turn a blind eye to that kind of behaviour."
Mr. Cotler, who did not run in the last election, said he personally appealed to Mr. Dion in a private meeting on Wednesday to do the right thing. He said the Trudeau government is sending a wrong message to the world if it doesn't honour its campaign commitment to pass a Magnitsky Act.
"Mr. Dion and the Liberal government have spoken about re-engaging internationally. This is an exemplary way to re-engage on behalf of human rights, on behalf of the rule of law, on behalf of the victims of a culture of impunity and criminality in Russia," Mr. Cotler said. "It is now the responsibility of the Liberal government to adopt this legislation."
Mr. Cotler, Mr. Wrzesnewskyj and Liberal MP Anthony Housefather joined NDP MP Murray Rankin at a news conference Thursday in support of a private member's bill tabled by Conservative MP James Bezan that is modelled on the Magnitsky Act. The same bill was tabled in the Senate by Conservative Senator Raynell Andreychuk.
Anti-Putin campaigner Bill Browder, who led the campaign to get the U.S. Congress to pass its law in 2013, also attended the news conference. He is a close friend of Canada's International Trade Minister, Chrystia Freeland, and said she and several other unnamed cabinet ministers do not agree with Mr. Dion.
"I don't think I would be speaking out of turn to say that she favours it very strongly. I have talked to her. She is very much on our side and not just her in the cabinet. We have had discussions with others in the cabinet who also said this was a no-brainer."
Sergei Magnitsky was a lawyer for Mr. Browder's Moscow-based Hermitage Capital Management hedge fund, which corrupt Russian officials expropriated in 2005. He was arrested in 2007 and died in prison after he accused Russian officials of theft. Subsequent investigations found Mr. Magnitsky had been neglected and beaten by prison staff.
The Magnitsky Act controversy is another recent example of where the Liberal government stands accused of favouring business deals over human rights. Mr. Dion awarded export permits in April for the bulk of a $15-billion deal to ship combat vehicles to Saudi Arabia despite growing concerns about that country's human-rights record.