The report said that the shop owner, Abraham Botines, a Spanish-born Jew, has put the beige-coloured soap bar carrying a Swatika inscription in a glass case with a card 'Poland 1940' and has put it on diplay.
Botines said that he was collecting the items as he belong to that period.
Though Botines is unsure whether soap is really made of human fats, it has been proved that Nazis did try to make soaps from the remains of holocaust victims.
The display of the soap which has brought back the horror of the holocaust has drawn criticism from Jewish Canadians.
"Fake or real, the soap is outrageous, and this individual, and others like him, are not preserving history in any way," said Alice Herscovitch, director of Montreal's Holocaust Centre in the report.
"The sale of objects which glorify Nazism and hatred, to me, do nothing. They certainly don't help us remember." she added.