Foreign Affairs Minister Chystia Freeland says the government has agreed to create a so-called Magnitsky Act that would expand Canada's international sanctions law to target gross human rights violators.
Freeland announced the decision Wednesday night in the House of Commons.
The move comes after the Commons foreign affairs committee agreed last month to support amending Canada's sanctions regime to include the rights violators "in honour" of the Russian whistleblower Sergei Magnitsky.
Magnitsky died in a Moscow prison in 2009 after accusing officials of a $230-million tax fraud.
The decision is bound to further strain relations with Russia, which has reacted strongly to the imposition of Magnitsky-style legislation elsewhere.
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After the Obama administration enacted its Magnitsky Act in 2012, Russian President Vladimir Putin responded with a law that banned American citizens from adopting Russian children.
Ottawa and the Kremlin have their own differences, which includes a Russian travel ban on Freeland.
Freeland was one of several Canadians placed on a Russian sanctions list in 2014 in retaliation for Western sanctions imposed on Russia following its annexation of Ukraine's Crimea region. In her previous career as a journalist, Freeland called Putin an authoritarian who was "really dangerous."
Liberal, Conservative and New Democrat MPs on the Commons committee supported the change to the Special Economic Measures Act as part of a mandated review of that law and the Freezing Assets of Corrupt Foreign Officials Act.
The committee decided to take an expanded look at the issues surrounding Magnitsky's death. Human rights watchdogs say he was beaten in prison and denied medical treatment.
To have done otherwise would have amounted to the committee missing a "piece of reality," Liberal MP Bob Nault, the committee chair, said in an interview.
The committee heard compelling testimony from lawyer William Browder, whose firm employed Magnitsky; former Liberal MP and human rights lawyer Irwin Cotler; chess legend and Russian democracy advocate Garry Kasparov; and other human rights advocates.
Kasparov told the committee that the legislation was important because Russia was working so hard to oppose it.
"That's why Putin and his cronies and his agents and his lobbyists were so aggressive in trying to repeal the Magnitsky Act," Kasparov said in December.
"It is because it will hurt the very foundation of his so-called social contract with the Russian elite."