Question Period Note: PAY EQUITY

What progress has been made on pay equity?

• We have taken long-overdue action to make equal pay for work of equal value a reality for federally regulated workers.
• The Pay Equity Act received Royal Assent on December 13, 2018. This legislation will bring about a dramatic shift in how the right to pay equity is protected in federally regulated workplaces.
• Ms. Karen Jensen was reappointed to the Canadian Human Rights Commission effective October 1, 2020. This allows for the continuation of the important preparatory work that Ms. Jensen has been leading since October 2019, including the development of educational materials and an online tool to facilitate the implementation of the Act. Ms. Jensen will serve as Canada’s first federal Pay Equity Commissioner when the Act comes into force.
• Implementing the Pay Equity Act remains a top priority for our Government. The disproportionate impact of the COVID-19 pandemic on women in the workplace has only reinforced the importance of addressing inequality to strengthen Canada’s post-pandemic economy.
• That is why the proposed Pay Equity Regulations were pre-published in Part 1 of the Canada Gazette from November 13, 2020 to January 13, 2021. Once finalized, the proposed regulations will complement the Act and allow the regime to be brought into force later in 2021.

Regulatory process

• The Labour Program is developing regulations setting out some of the key elements of the pay equity regime that need to be in place before the Act can come into force. This includes, among other things, regulations that will specify the manner of posting documents in the workplace, set out the method(s) to complete a pay equity plan in a workplace with no predominantly male job classes (proxy), and adapt the process established under the Act for updating pay equity plans (maintenance).

• The regulations were pre-published on November 13, 2020 for an extended comment period of 60 days (until January 13, 2021). Thirty-two stakeholder submissions were received during the comment period.

• Once all submissions have been reviewed and analyzed, the regulations will be finalized and published in the Canada Gazette, Part II. This is expected to take place later in 2021.

Consultations and expert input
• 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 legislative consultations with employee, employer and advocacy stakeholders has been taken into consideration, as well as recommendations from the Parliamentary Special Committee on Pay Equity and the Pay Equity Task Force (Bilson Report). The legislation builds on lessons learned from 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.

• As part of the regulatory development process, Labour Program officials held a series of information sessions as well as solicited feedback from stakeholders, including employer representatives, labour representatives, advocacy groups, and pay equity experts, through a consultation paper that was distributed in the summer of 2019.
Pay Equity Commissioner’s Appointment

• On September 10, 2019, Ms. Karen Jensen was appointed to the Canadian Human Rights Commission for a term scheduled to end September 30, 2020. Ms. Jensen started her work with the Commission on October 16, 2019, to prepare for the coming into force of the Pay Equity Act and will become the Pay Equity Commissioner upon the coming into force of the Act, for a term of three years.

• Ms. Jensen was reappointed as a full-time member of the CHRC, effective October 1, 2020, to ensure she is able to continue important preparations for the coming into force of the Act.

• Ms. Jensen 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 Labour’s office, the Minister of Justice’s office and the Labour Program.
Gender wage gap
• In Canada in 2019, for every dollar a man earned, a woman earned 89 cents on the dollar as measured in hourly wages for full-time workers.

• 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, the continued appointment of skilled, talented women into leadership positions, and better access to flexible work arrangements.

Funding announcement
• Last fall 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 will go to the CHRC to implement and administer the new regime;
• $8 million to the CHRT through the Administrative Tribunals Support Service of Canada to support enforcement of the legislation; and
• $3 million will go to ESDC to support the establishment of the new regime.

• Additionally, $49.4 million will be 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 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, the Act is expected to encourage private sector employers to move forward with proactive pay equity in their workplaces, which will lead to further benefits.

Highlights of the legislation

• On December 13, 2018, the Pay Equity Act (the Act) received Royal Assent. The proposed regulations for the Act were pre-published in Part 1 of the Canada Gazette on November 13, 2020. The Act is expected to come into force in 2021. The new legislation will direct employers to take proactive steps to ensure that they are providing equal pay for work of equal value.

• When the Act is in force, the Pay Equity Commissioner (Ms. Karen Jensen) will play both an education and enforcement role with regard to the Act. The Commissioner will be responsible for assisting individuals in understanding their rights and obligations under the Act and facilitating the resolution of disputes under the Act. The Commissioner will have a range of tools to enforce the Act, including the power to initiate audits, conduct investigations, receive complaints, and issue orders and administrative monetary penalties.

• The Act will apply to approximately 1.2 million workers employed by federally regulated public and private sector employers with 10 or more employees as well as in the Prime Minister’s and Ministers’ offices.
o The Act will require employers to establish a pay equity plan within three years of becoming subject to the Act.
o The Act will require that pay equity plans be reviewed and updated at least once every five years, in order to identify and close any gaps that may have emerged.

Amendments to the Parliamentary Employment and Staff Relations Act
• In addition, the regime will apply to parliamentary workplaces through amendments to the PESRA in a manner tailored to respect parliamentary privilege. The Pay Equity Commissioner will also oversee the regime in these workplaces, appeals will be heard by the Federal Public Sector Labour Relations Employment Board.
Amendments to the Canadian Human Rights Act
• The amendments to the CHRA will make the Pay Equity Commissioner a full time member of the Canadian Human Rights Commission (CHRC) and establish the Pay Equity Unit, which will be made up of CHRC employees who will support the Pay Equity Commissioner. The amendments will also add additional members to the Canadian Human Rights Tribunal.
Pay equity requirements as part of the Federal Contractors Program
• Pay equity requirements will be extended, as a non-legislative measure, to contractors with 100 or more employees whose contracts to supply the Government with goods or services are worth $1 million or more.