Question Period Note: PAY TRANSPARENCY

The Government of Canada maintains its commitment to addressing wage gaps through the introduction of pay transparency measures for federally regulated private-sector employers subject to the Employment Equity Act (the Act).

• Budget 2018 provided $3.0 million over five years to introduce pay transparency for federally regulated private-sector employers with 100 or more employees to reduce the wage gap.

• Pay transparency will provide Canadians with user-friendly, comparable online information on the wage gaps of these employers, raising awareness of wage gaps that affect women, Indigenous peoples, persons with disabilities and members of visible minorities.

• Pay Transparency will prompt employers to examine their practices and show leadership in reducing wage gaps, helping to shift business culture and expectations towards greater equality.

• This initiative demonstrates the Government of Canada’s commitment to supporting equality and diversity in federally regulated Canadian workplaces as well as strengthening the middle class.

Budget
• Budget 2018 committed $3.0 million over five years, starting in 2018-19, to implement pay transparency.
• A minor legislative amendment to the Act was passed through the Budget Implementation Act, 2019, No.1 (Royal Assent – June 2019) to provide legislative authority for the proposed amendments to the Regulations.
Achievements
• On December 3, 2018, Treasury Board approved the funding requested for the pay transparency measures.

• Seven in-person consultations were held in January and February 2019 to solicit feedback from stakeholders on proposed regulatory amendments to the Employment Equity Regulations required to support the pay transparency initiative.
o The sessions were held in Vancouver, Calgary, Toronto (x2), Gatineau, Montreal and Moncton with a total of approximately 260 people in attendance.
o Participants included federally regulated employers, federal contractors, unions, special interest groups, industry associations, and representatives from provincial and municipal orders of government.
o Approximately 19% of employers covered by the Legislated Employment Equity Program and 15% of employers covered by the Federal Contractors Program attended.

• An online questionnaire was sent to stakeholders in March 2019 to solicit additional feedback that further informed the approach to regulatory amendments. The deadline for submissions was March 31. The Labour Program received 259 online responses to the questionnaire, as well as six written submissions.

• In August 2019, the proposed amendments to the Regulations were published in Canada Gazette, Part I for a 30-day public comment period.

• The existing Workplace Equity Information Management System (WEIMS) is being modified and will include a new online data visualization application for pay transparency.
Next Steps
• To implement pay transparency, the Labour Program will refine the way salary information is collected and reported by federally regulated private-sector employers covered by the Act.

• Final publication of the proposed regulations in Part II of the Canada Gazette is expected for the fall of 2020. There will be no changes to employment equity reporting for the June 1, 2021 deadline.

• The Labour Program is developing an IT solution to manage the information that will be collected and ensure it is posted in a user-friendly format.

• The Labour Program will also develop guidance for employers and program officers to support the implementation of pay transparency and amendments to the Regulations.

There is a need for initiatives to reduce the wage gap between men and women
• Despite narrowing educational and work experience gaps, the gap in wages between men and women persists among workers in Canada. Some of the reasons cited for this ongoing disparity include inflexibility in standard hours of work; workforce interruptions; lower likelihood of negotiation over salary, raises, and promotions; and, gender discrimination in hiring.

• Among federally regulated employees in permanent full-time positions in 2017, 63.8% of men and 48.6% of women earned $60,000 and more per year. This compares to
o 63.0% of Aboriginal men and 41.5% of Aboriginal women
o 61.0% of men with disabilities and 45.7% of women with disabilities
o 60.5% of visible minority men and 48.4% of visible minority women

Pay transparency can contribute to reducing the wage gap

• Pay Transparency will prompt employers to examine their compensations and human resources practices, and show leadership in reducing wage gaps. Making pay information available can help to shift business culture and expectations towards greater equality.

• Transparency policies have become increasingly popular since the 1980s, most notably in the area of environmental regulation and financial disclosure. The key lesson learned has been that transparency regimes succeed when they can benefit disclosers, by allowing them to signal their effort to improve or their success in doing so, and when users of the information have a strong voice and are motivated to ensure that reporting is accurate.

Firms are already required to provide pay information through the Employment Equity Act

• The Employment Equity Act requires employers to create equitable workplaces and build a workforce that is representative of the four designated groups – women, Indigenous peoples, persons with disabilities, and members of visible minorities – according to relevant labour market conditions.

• Currently, the employment equity reports submitted annually by employers are available to the public online but do not include wage gap data.

• The new approach will provide Canadians with accessible, comparative online wage gap information, available on a Government website.

• According to Statistics Canada, in Canada, employed core-aged women (25 to 54 years old) earned 87 cents for every dollar compared to men in terms of their average hourly wage in 2018 (a wage gap of 13.3%), up from 81 cents in 1998.

• International jurisdictions including Austria, Belgium, Germany, Portugal and the United Kingdom (UK) have put pay transparency measures in place. In the UK, as of January 1, 2018, employers with 250 or more employees are required to calculate and publish 14 different gender pay gap metrics on their website as well as the government website.

• The Canadian transparency requirement would apply to the federally regulated private-sector employers covered by the Employment Equity Act.