Question Period Note: PAY EQUITY

What is the Labour Program’s mandate on Pay Equity?

The former Minister of Labour had a mandate letter commitment to continue advancing the implementation of the Pay Equity Act (Act) across federally regulated workplaces.

The Pay Equity Act and supporting regulations came into force on August 31, 2021.

In June 2024, the Labour Program published two sets of regulations in the Canada Gazette, Part II to support the advancement of the Act.

The Regulations Amending the Pay Equity Regulations (Administrative Monetary Penalties and Technical Amendments), which strengthen the Pay Equity Commissioner’s ability to encourage compliance with the Act.

The second set of regulations, Application of the Pay Equity Act to Ministers’ Offices Regulations and the Order Grouping Ministers’ Offices for the Purpose of a Pay Equity Plan, which support the application of the Act in ministers’ offices.

The proactive pay equity regime applies to federally regulated public and private sector workplaces with 10 or more employees.

The regime is administered and enforced by Canada’s Pay Equity Commissioner at the Canadian human rights commission (CHRC).

The Pay Equity Commissioner has granted the Treasury Board Secretariat extensions to develop the first pay equity plans for the Canadian Armed Forces (CAF), the Core Public Administration (CPA) and the Royal Canadian Mounted Police (RCMP). Pay equity plans are now due as follows:

CAF: by August 31, 2026 (two-year extension)

RCMP: by February 28, 2026 (18-month extension)

CPA: by August 31, 2027 (three-year extension)

The previous Minister of Labour was mandated to continue advancing the implementation of the Pay Equity Act across federally regulated workplaces.

With the Act now in force, the Pay Equity Commissioner carries out their duties, including assisting workplace parties in understanding their rights and obligations.

Pay Equity Commissioner’s Appointment

On June 27, 2023, Ms. Lori Straznicky was appointed as Canada's new federal Pay Equity Commissioner at the Canadian Human Rights Commission. The Pay Equity Commissioner will continue to lead a dedicated unit responsible for assisting stakeholders and bargaining agents on pay equity issues; investigating complaints related to contravention of the Pay Equity Act; and educating employers on their obligations under the Act.

Ms. Straznicky was selected by a committee that included representatives from the Prime Minister’s office, the Privy Council Office, the Minister of Employment, Workforce Development and Disability Inclusion’s office, the Minister of Justice’s office and the Labour Program.

Gender wage gap

While proactive pay equity legislation is an important tool that will contribute to reducing the gender wage gap by addressing the portion of the gap that is due to the undervaluation of women’s work, 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 and the continued appointment of skilled, talented women into leadership positions.

Funding announcement

In fall 2018, the Government announced $26.6 million over six years and $5.8 million per year ongoing to support the administration of the new proactive pay equity regime, over the first 6 years starting in 2018–19:

$15 million for the CHRC to implement and administer the new regime;

$8 million for the CHRT through the Administrative Tribunals Support Service of Canada to support enforcement of the legislation; and

$3 million for ESDC to support the establishment of the new regime.

Additionally, $49.4 million has been made available to implement the proactive pay equity regime within the federal public service.

Parliamentary Budget Officer Fiscal Analysis Report

On November 4, 2020, the Office of the Parliamentary Budget Officer (PBO) released a report providing a fiscal analysis of the new proactive pay equity regime introduced in the Act. The objective of the report is to assist parliamentarians in scrutinizing the financial impact that the Act will have on the Government. The report was produced based on PBO analysis using information from publicly available sources (e.g. Labour Force Survey) and information provided by government departments, including the Labour Program.

The PBO report estimated that the Act, once it is fully implemented, would cost $477 million in increases to eligible public sector employees’ salaries and an additional $144 million in expenditures on pensions and other employee benefits. While this will entail costs to the federal government and taxpayers, external analysis of the PBO report has noted that these costs will be offset by the positive effects of the increase in salaries and other benefits for eligible employees (e.g. increased tax revenue due to higher wages, increased spending). In addition, by requiring private sector employers to move forward with proactive pay equity in their workplaces, the Act will lead to further benefits.1

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