The video features an unidentified member of Canadian Forces Base Greenwood in Nova Scotia. The man is in brown makeup and wearing a turban, pretending to be Osama bin Laden’s brother.
The video was produced for a formal dinner on the base in January 2010, a time when Afghanistan was still a combat mission for Canada and there were about 2,800 Canadian military personnel serving there.
In a four-minute excerpt, the bin Laden character jokingly boasts of working directly for his brother.
The military said it thought it had destroyed every copy of the video, until the CBC obtained a copy of it in November 2012.
The military police said charges are not warranted and the chain of command took prompt and appropriate actions.
"We have investigated the allegations to determine the facts," said Col. Tim Grubb, the Canadian Forces provost marshal, in a release.
"We have analyzed the evidence and concluded that charges are not warranted."
Lt.-Gen. Yvan Blondin, who is with the Royal Canadian Air Force, said filming the video showed "poor judgment and a lack of sensitivity."
He reiterated that Canadians expect professionalism from the Armed Forces, but said everyone has learned from the ordeal