Fair Pay in Canada
“Because it’s 2015!” When the Canadian Prime Minister took office four years ago, he established gender parity in appointing his cabinet as if it were the most natural thing in the world – so at least since 2015, Canada has been a shining example to the world in matters of equality and diversity. But how do things look with regard to fair pay in the country that is the second largest in terms of geographical size? Is it doing justice to its forward-looking reputation? In the latest stop of our journey around the world via around 80 laws on pay transparency, we take a closer look behind the scenes in Canada.
Even if Canada, known for its gigantic forests and almost endless wilderness, trails sadly behind in matters of sustainability and environmental protection internationally, overall it counts as one of the world’s most modern countries. Particularly regarding matters of equality and diversity, it has an extremely progressive reputation. But does it also live up to this reputation in matters of fair pay?
For there is still need for action, as Prime Minister Justin Trudeau found. Upon taking office, he established gender parity in his cabinet when he appointed 15 women and 15 men, with the famous words: “Because it’s 2015!” Despite this clear message, even Canada is yet to close the pay gap between men and women. Statistically, the country has a gender pay gap of 16.1 percent, putting them in 16th position internationally in the 2018 Global Gender Gap Report.
Pioneering policies in the provinces
As has been seen in so many other countries, Canadian politics have too met this challenge with equal pay laws that set the direction for the economy. Thus, since 2018 Canada has been a member of the Equal Pay International Coalition (EPIC), and since 1971 there has been a Ministry for Equality that operates on a nationwide basis. In addition, great commitment to establishing the right general conditions has been shown by individual provinces. The provinces of Ontario and Quebec in particular are working on new equal pay laws, in close consultation with business and trade unions. The objective: in future, Canadian companies should calculate their in-house gender pay gap and publish it in a dedicated web portal available for all to see. In this way, transparency will be ensured and the pay gap will receive greater attention.
In Ontario, the country’s second largest province, a Fair Pay Act has already been in force since 1990: the so-called Pay Equity Act obliges companies with ten or more employees to evaluate all jobs neutrally and also to give equal pay for equivalent activities. A commission is responsible for its implementation. This commission can mediate as an arbitrator in case of dispute, it can contact firms to enquire about how things stand, and can impose penalties if the statutory requirements are not observed. Roles dominated by women and by men are also taken into account, namely those where more than 60% of the jobs are taken by women or by men; using a points system, the activities are evaluated and compared with one another.
Progress at the national level
Since 1997, there has also been a similar Fair Pay Act and a similar commission in Quebec, Canada’s largest province, which adapted the process from Ontario to suit its own needs. Here too, companies with 10 or more employees are obliged to determine differences in pay, close pay gaps, report annually, and to compare job evaluations. In addition, every five years the plan is reassessed. A “Pay Equity Committee” monitors the process, supported by management and labour. Such a committee is recommended for a company with 50 to 99 employees, and is compulsory for companies with 100 or more employees. The costs of the procedure must be paid by the companies themselves.
At the national level, in September 2019 a new law was passed, and a Pay Equity Commission was established. Since the start of 2020, the Pay Equity Act applies to the whole of Canada. This law also comes with obligations for companies with ten or more employees. Those that operate at the national level must actively ensure pay equity and must demonstrate that the same and equivalent roles are paid equally. The law thus affects around 1.2 million employees in Canada.
“Because it’s the smart thing to do!”
Canada is consequently showing itself to be extremely progressive, and in international comparison, it is counted amongst the particularly consistent pioneers in equal pay. And in doing so, the country is acting in its own interests. In his keynote speech at the World Economic Forum 2018, the feminist Prime Minister demonstrated his conviction that equality and economic growth are inseparably linked: “I’d like to focus on a fundamental shift that every leader in this room can act on immediately. (...) I’m talking about hiring, promoting, and retaining more women. And not just because it’s the right thing to do, or the nice thing to do, but because it’s the smart thing to do.”
FPI - What we do
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