The Federal Pay Equity Act, which took effect on Aug. 31, 2021, requires all federally regulated employers with 10 or more employees to prepare and post a pay equity plan by Sept. 3, 2024.
In addition, it requires all unionized employers or those with 100 or more workers to establish a pay equity plan — which must be updated every five years — through a committee composed of various workplace representatives. Its goal is to address systemic gender-based workplace discrimination and ensure all federal employees who are doing work of equal value receive equal pay.
Read: New pay equity legislation aiming to close gender wage gap
Two years later, has the act brought Canada closer to pay equity? “It’s hard to say if this new law is doing anything yet,” says Andrea Gunraj, vice-president of public engagement at the Canadian Women’s Foundation. “We’re still in a situation where women working full time earn, on average, 88 per cent of what men earn.”
Pay equity across Canada
Six Canadian provinces have enacted specific pay equity legislation for the public sector:
• Manitoba
• Ontario*
• Quebec*
• New Brunswick
• Nova Scotia
• Prince Edward Island
* In Ontario and Quebec, pay equity legislation also applies to the private sector.
Three provinces have yet to enact pay equity laws, but have developed policy frameworks for negotiating pay equity with some specific public sector employees:
• British Columbia
• Saskatchewan
• Newfoundland and Labrador
Alberta is the only province that has neither passed pay equity legislation nor developed a pay equity negotiation framework.
The Federal Pay Equity Act doesn’t currently apply to the governments of Yukon, the Northwest Territories and Nunavut.
All of Canada’s jurisdictions have human rights legislation prohibiting discrimination in employment and which, in the absence of — or in addition to — pay equity legislation, can be a tool for addressing discriminatory pay practices.
Until federal employers have gone through the compliance process and made adjustments, it won’t be clear if there are any significant changes, says Wendy Glaser, director of pay equity at KPMG in Canada. “The act is quite detailed in employer and committee responsibilities, so we’re currently seeing a lot of conversations about committee composition [and] what needs to be shared so members can complete the pay equity process.”
A step in the right direction
The new Federal Pay Equity Act’s reporting structure is what sets it apart from previous federal and provincial legislation.
“There’s a level of accountability because there’s public reporting,” says Gunraj. “That’s going to allow workers and hiring managers to see and compare wages across industries.”
Read: Survey finds gender pay gap narrowing in Canada
Another positive aspect is the mandate for employers to assess data annually to see if they’re moving in the right direction. “Employers can look at data for different groups and move towards a more equitable situation,” she says. “How are women of colour, older women or disabled people doing?”
Ashley MacIsaac Butler, director of corporate engagement and government affairs at Catalyst in Canada, says the act isn’t as clear and concrete as it could be, but it’s a step in the right direction. “We’re going to receive some great data that will help move towards closing the gender pay gap. There needs to be more metrics and measuring because what gets measured gets done.”
Staying on track
Despite general agreement that the new federal act is a positive step, it only applies to a very small segment of Canada’s workforce — only about six per cent of employers are federally regulated.
The rest fall under provincial or territorial jurisdictions, which have little or no pay equity legislation. However, an assortment of federal, provincial and territorial legislation, including the Human Rights Code and the Canada Labour Code, have been introduced since the 1970s. So why hasn’t there been more progress on narrowing the gender pay gap?
“What frustrates me is all of these different acts that have been in place for decades haven’t quite done it,” says Gunraj. “There have to be incentives and there have to be consequences for employers to take proactive steps to ensure they are providing equal pay for work of equal value.”
Read: Pay transparency could help solve gender, racial wage inequities: experts
Indeed, enforcement is key, says Lisa Cabel, a partner and national leader in KPMG in Canada’s law employment and labour practice. “With the exception of Quebec, provincial legislation hasn’t been heavily enforced, whereas the new federal legislation is very focused on ensuring compliance with the act and there’s absolutely going to be an audit or review.”
No quick fix
Pay equity and the gender pay gap are related issues, but not interchangeable, says MacIsaac-Butler. “We can achieve pay equity, but until other issues are addressed, such as pay transparency, affordable daycare, gender bias and, most importantly, increasing the representation of women in higher paying jobs, the gender pay gap will continue.”
Ultimately, the approach has to combine a matrix of solutions, says Gunraj, including organizational leadership and workplace policies and practises. “[Employers] have to start holding themselves to higher standards and show more accountability.”
A pay equity exercise offers many benefits for employers, says Glaser, including a high-level overview of compensation practises and policies and shows if the organization has good data governance, up-to-date job documentation and an equitable job evaluation system.
Read: My Take: Employers can do more to shrink gender pay, pension gaps
However, a 2023 Equileap report found that, among almost 4,000 global companies, including the 17 per cent that publish gender pay gap data, not a single one has closed their gender pay gaps, according to Gunraj.
“It’s interesting that even the biggest companies that are doing their best are still not closing the gender pay gaps. So how can smaller organizations that don’t have the same HR resources be expected to do so?”
Moira Potter is a freelance writer.