Let's start with ICAO.
ICAO has standards and recommended practices. It's up to a state to either adhere or not adhere to them. If they do not adhere, they file a difference to let the rest of the world know that they're not in compliance with this particular area. One area is where ICAO says the maximum age of an airline pilot should fly is age 65. Canada files a difference because you cannot discriminate based on age in Canada. That's an example where Canada would not comply.