When the US administration's January 2025 executive orders dismantled federal diversity, equity and inclusion programmes in the United States, a wave of S&P 500 employers followed suit. Google, Goldman Sachs, McDonald's and Walmart publicly scaled back inclusion policies they had spent years building. Costco, Apple and Delta Air Lines held their positions. A new academic analysis, reported by The Guardian on 14 August 2026, now offers a finding that should register for Canadian HR leaders and job-seekers alike: the companies that kept their commitments paid no measurable financial price and briefly outperformed those that reversed course. The political dynamics driving rollbacks across the border do not map directly onto Canada's legal landscape, where the federal Employment Equity Act (R.S.C. 1995, c. 44) actually obliges federally regulated employers to take positive steps toward workforce representation, not retreat from them.

The finding cuts against the cost-cutting rationale many large employers have used to justify dismantling inclusion programmes. It also lands in a labour market where a candidate's read of a company's culture often starts with its public stance on who gets hired and promoted.

What the research actually measured

Jacob Grumbach, an associate professor at UC Berkeley's Goldman School of Public Policy, analysed S&P 500 companies in the period following the January 2025 US executive orders. His methodology centred on abnormal returns, the gap between a stock's expected and actual performance, to isolate how markets responded to each firm's specific DEI decision. To classify which companies did what, he cross-referenced news coverage, shareholder proposal votes, and data from the activist tracker DEI Watch.

"No matter how we measure DEI in companies, we find the same answer," Grumbach said, adding that retaining DEI commitments had no measurable effect on financial performance.

The market, in other words, did not punish firms that held firm. In the short window after the executive orders, those firms briefly outperformed the companies that reversed course. The financial-protection argument for a public rollback, on the numbers Grumbach measured, is not supported by the evidence.

The regulatory context Canada actually operates in

The US environment that produced these rollbacks differs substantially from Canada's. In late 2025, the US Equal Employment Opportunity Commission declared that DEI-driven workplace initiatives are unlawful, creating sharp legal pressure on American employers. No equivalent declaration has come from the Canadian Human Rights Commission (CHRC - Commission canadienne des droits de la personne), Canada's federal anti-discrimination regulator. Federal employers in Canada are governed by the Canadian Human Rights Act (R.S.C. 1985, c. H-6), which prohibits discrimination across 13 protected grounds, and by the Employment Equity Act (R.S.C. 1995, c. 44), which requires federally regulated private-sector employers, federal contractors, and federal public service agencies to actively identify and remove barriers for four designated groups: women, Indigenous peoples, persons with disabilities, and visible minorities. These are legal obligations, not optional programme choices.

Provincial employers, covering roughly 94% of Canada's workforce, are subject to provincial human rights codes rather than federal employment equity legislation. Ontario's Human Rights Code (R.S.O. 1990, c. H.19), BC's Human Rights Code, Alberta's Human Rights Act, and Quebec's Charter of Human Rights and Freedoms each prohibit discrimination in employment. Quebec adds a further layer through Bill 96 and the Charter of the French Language, which requires French as the language of the workplace, a factor that shapes how inclusion programmes are designed and communicated in that province.

David Glasgow of the Meltzer Center for Diversity, Inclusion and Belonging at NYU School of Law observed that most companies he advised made adjustments to their diversity principles on account of legal and regulatory environments rather than eliminating commitments outright. Glasgow described many corporate responses as landing in what he called the messy middle, where organisations are sticking with some things, deleting others and then reframing or rebranding some. For Canadian HR teams, the regulatory floor is meaningfully higher than in the US, which changes the calculus of where the risk actually sits.

For employees: reading the signal

If you are choosing between offers, evaluating whether to stay, or entering a new job search, a company's visible stance on inclusion is one of the clearer public signals available about how it manages internal culture. It is not the only indicator, but it is one you can assess before you sign anything.

The evidence that candidates weigh this is durable. A Glassdoor survey in 2020 found that 76% of job seekers consider a company's workforce diversity when deciding whether to apply. Research by Catalyst, the nonprofit that tracks women and inclusion in workplaces across Canada and internationally, found that between 50% and 69% of people of colour who perceive or anticipate workplace bias intend to leave their jobs. These findings pre-date the current rollback wave; the underlying behaviour has not softened.

Statistics Canada (Statistique Canada) projects that the share of Canadian workers who are immigrants will rise from one in four to one in three between 2016 and 2036. That shift is already underway. What a company does or does not do on inclusion shapes the candidate pool it can realistically attract in the decade ahead.

Practical questions worth asking before accepting an offer, or during a performance or review conversation:

• Has the employer publicly changed its diversity language in the last 18 months? If yes, what specifically changed: wording, budget, or the programme itself?
• Are employee resource groups still funded and sponsored by senior leadership, or have they been quietly wound down?
• Do promotion and pay-review processes still track outcomes across demographic groups, or has that cohort-level reporting disappeared?
• In your interview process, who is in the room, and does the panel reflect the workforce the company says it is building?

These are not confrontational questions. They are the same due diligence you would apply to a company's salary transparency, remote-work policy, or promotion structure. Reviews from current and former employees are a useful counter-check, particularly when the corporate careers page and lived experience diverge.

For HR leaders and recruiters: the hiring-risk read

If your leadership team is weighing a rollback on cost or reputational grounds, Grumbach's analysis complicates the business case considerably. The market did not reward reversals. It did not penalise holdouts. Whatever other rationale exists for changing course, stock-price protection is not one that the current evidence supports.

The talent-side risk is more concrete and more lasting. McKinsey's research found that firms with ethnic diversity in the top quartile are 36% more likely to outperform on profitability, and those with top-quartile gender diversity are 25% more likely. Statistics Canada's projection that immigrants will represent one in three Canadian workers by 2036 is not a demographic forecast to note and set aside: it describes the workforce your organisation will be recruiting from, and competing for, over the next decade.

CPHR Canada and its provincial associations, including HRPA Ontario and CPHR BC/Yukon, have consistently noted in their professional development guidance that sustainable people practices are built on equitable process design, not programme labels. The distinction Glasgow draws at the Meltzer Center is worth holding onto: legal exposure in Canada tends to sit on specific practices, such as programmes restricted by protected class in ways that create adverse treatment, not on the underlying commitment to fair hiring and inclusive management. Reframing a programme to reflect current guidance is a defensible HR response; dismantling the underlying practice carries different consequences under both the Employment Equity Act and provincial human rights codes.

Three practical considerations for HR teams navigating this period in Canada:

• Separate the programme from the label. If your DEI initiative has been rebranded internally as a workforce strategy or talent-excellence programme, verify that the substantive activities, barrier identification, representation targets, and cohort-level review, remain intact. Cosmetic rebranding that strips the underlying practice leaves your organisation exposed under the Employment Equity Act (R.S.C. 1995, c. 44) if you are a federally regulated employer, and it accelerates regretted attrition regardless of jurisdiction.
• Monitor attrition data by cohort, not just aggregate headcount. If the Catalyst finding holds in your workforce, employees who perceive bias are most likely to leave first and quietly, before that departure shows up in engagement scores. Regretted attrition among under-represented groups is the early indicator that rollback debates in boardrooms consistently overlook.
• Audit your employer brand as candidates now encounter it. The public read of your leadership's statements, your Glassdoor profile, and what recent departures say in reviews form a composite signal that no recruitment campaign fully overrides. If your careers page still carries 2023 language and your organisation's 2026 public statements point in a different direction, candidates who care about this, a majority according to the Glassdoor survey, will notice.

The bottom line

A single academic analysis is not the definitive word on how inclusion decisions affect corporate performance. Grumbach's window is short, and the sample is the S&P 500, not the broader North American or Canadian labour market. But it is the clearest quantitative challenge yet to the argument that financial caution requires rolling back diversity commitments.

For workers and candidates in Canada, the finding reframes inclusion posture as a legitimate factor in evaluating an employer, sitting alongside pay, progression, and culture. For HR leaders, it removes one of the more comfortable justifications for a public retreat and returns the question to where it belongs: what does your organisation actually believe about who gets hired, promoted, and heard, and does your practice match your careers page? In Canada, unlike in the US, that question carries statutory weight under both the Employment Equity Act and the Canadian Human Rights Act, regardless of what political pressures arrive from across the border.