Government of Canada introduces historic proactive pay equity legislation

parliament building

Ottawa, October 30, 2018- Advancing gender equality is not just good for women; it’s good for all Canadians. When Canadian women can count on equal pay for work of equal value, our economy grows stronger, families prosper and communities thrive.

New regime to include enforcement measures

That’s why the Federal government has introduced proactive pay equity legislation for the federal jurisdiction: an Act to Establish a Proactive Pay Equity Regime within the Federal Public and Private Sectors (Pay Equity Act). This historic legislation will ensure that more women are fairly compensated for their hard work.

Under a proactive pay equity regime, employers will need to examine their compensation practices and ensure that women and men working in federally regulated workplaces, including the federal private sector, the federal public service, Parliamentary workplaces and Ministers’ offices, receive equal pay for work of equal value.

Terry Sheehan, MP“It was an honour to serve and contribute to the important work of the Pay Equity Committee. I am pleased the government is moving forward with addressing this very important issue. Equal pay for equal work is long overdue.” – MP Terry Sheehan, Sault Ste. Marie

A Pay Equity Commissioner will be appointed within the Canadian Human Rights Commission and will play both education and enforcement roles with regard to the legislation. The Commissioner, supported by a unit of subject-matter experts, will be responsible for assisting individuals in understanding their rights and obligations under the Act and facilitating the resolution of disputes related to pay equity. The Commissioner will have dedicated funding and a range of enforcement tools, including the power to initiate audits, to conduct investigations, and to issue orders and administrative monetary penalties.

Additionally, proposed amendments to the Parliamentary Employment and Staff Relations Act (PESRA) will extend proactive pay equity requirements to Parliamentary workplaces in a manner that respects Parliamentary privilege.

Patricia Hajdu, MP“Proactive pay equity is not just the right thing to do, it’s the smart thing to do. The bottom line is that when people are treated fairly and are given an equal opportunity to succeed and to reach their full potential, we all benefit.” – The Honourable Patty Hajdu, Minister of Employment, Workforce Development and Labour


Quick Facts

In Canada in 2017, for every dollar a man earned, a woman earned 88.5 cents on the dollar as measured in hourly wages for full-time workers. When comparing overall earnings on an annual basis, women earned even less – just 69 cents for every dollar earned by men.

The gender wage gap is a complex issue with multiple underlying causes. In addition to the undervaluation of work traditionally performed by women, these causes include, among other things:

  • over-representation of women in part-time work;
  • labour market segmentation of women in low paying sectors;
  • women’s lack of representation in senior positions;
  • bias and discrimination in the workplace; and
  • women’s greater share of unpaid work.

While proactive pay equity legislation is an important tool that will contribute to reducing the gender wage gap, it needs to be part of a broader array of policy tools, such as the Government’s investments in early learning and child care, improved financial support for training and learning, enhanced parental leave flexibility, pay transparency, the continued appointment of skilled, talented women into leadership positions, and better access to flexible work arrangements.

On October 25, 2018, the Government of Canada released its Proactive Pay Equity What We Heard report, which summarizes feedback from stakeholders, including key employer, employee and advocacy stakeholders. In developing the proactive pay equity regime, input received during the 2017 Labour Program consultations with employee, employer and advocacy stakeholders has been taken into consideration, as well as the reports of the Special Committee on Pay Equity (ESPE) and the Pay Equity Task Force (Bilson) and lessons learned in Ontario and Quebec, the only two jurisdictions in Canada that have had a proactive approach to pay equity applying to both the public and private sectors for many years.

Since 1977, the Canadian Human Rights Act has recognized pay equity as a right for employees in the federal jurisdiction under a complaint-based system (section 11). As a result, it does not require employers to actively examine their compensation practices; instead, the onus is placed on employees to bring complaints forward to redress instances of pay discrimination. A proactive system would take that burden off employees and would instead require employers to undertake a pay equity analysis to ensure that their compensation practices are in line with pay equity requirements.