The appeal by Richard Falk, the UN special investigator on human rights in the occupied territories, also provoked a sharp response from Israel and the United States, which said it would "poison the environment for peace."
Canadian Foreign Minister John Baird said Thursday that the remarks were "both offensive and unhelpful."
Falk has "not only done a disservice to the United Nations, but also to the Palestinian people," he added.
"Canada calls on Mr Falk to either withdraw this biased and disgraceful report - or resign from his position at the United Nations."
Earlier this week Falk said the UN General Assembly and civil society should boycott firms that help build and maintain Israeli settlements.
He singled out Caterpillar, Hewlett Packard and Motorola of the United States, Veolia Environment of France, G4S of Britain, Dexia of Belgium, Volvo Group and Assa Abloy of Sweden, Ahava, Elbit Systems and Mehadrin of Israel, Riwal Holding Group of the Netherlands and Cemex of Mexico.
The international community considers settlements illegal, and Palestinians view them as the greatest threat to the peace process, which last ground to a halt more than two years ago over a dispute about settlement construction.
The United States also hit out at the statement by Falk, with US envoy to the United Nations Susan Rice calling it "irresponsible and unacceptable."
"(His) recommendations do nothing to further a peaceful settlement to the Israeli-Palestinian conflict and indeed poison the environment for peace," the US ambassador added, saying his work "only damages the credibility of the UN."
Karean Peretz, spokeswoman for the Israeli mission to the United Nations, dismissed Falk's "grossly biased report, based on a one-sided mandate, which is completely divorced from reality."
Falk is named by the UN Human Rights Council, not by UN leader Ban Ki-moon.
COMMENTS (4)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
Canadian policy is so pro-Israel that its embarrassing. Even the Israelis question their government more than Canada. Its to do with an extreme Christian fundamentalist mind-set that Canadian PM Stephen Harper has in which anyone working against Islam is blindly supported.
Shameless behavior and Shameful, derogatory and inhuman demand made by the Canadian Minister. He should resign himself. The USA, Israel and all those who build settlements in Occupied territories are involved in illegal activities and will someday pay for it.
“grossly biased report, based on a one-sided mandate, which is completely divorced from reality.”
What reality? Is there any justification whatsoever of building settlements in land considered as occupied by UN including Canada / USA
What peace? The hypocrisy of US and Canada is appalling.