Question Period Note: What is the Labour Program’s mandate on Pay Equity?

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

New and amended pay equity regulations introducing administrative monetary penalties (AMPs) and clarifying obligations for ministers’ offices came into force in June 2024.

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

The framework is administered and enforced by Canada’s Pay Equity Commissioner at the Canadian Human Rights Commission.

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

The Office of the Parliamentary Budget Officer (PBO) published fiscal analyses of the new pay equity framework in 2020 and 2021 to assist parliamentarians in scrutinizing the financial impact that the Act will have on the Government.

These reports were produced based on PBO analysis using information from publicly available sources (e.g. Labour Force Survey) and information provided by government departments.

The most recent report estimates the net fiscal impact to be $385 million in 2025-2026, the first full fiscal year under the framework and increased compensation cost in Public Service of Canada (PSC) to total $620 million, including $544 million in salary increases, for the same fiscal year.

While these measures entail cost 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. an increase in federal personal income tax revenue of $235 million is estimated in 2025-2026).

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