Shrinking the gender pay gap in Canada
Although Canada has not yet reached parity in gender pay, its recent ranking as 16 out of 144 countries surveyed shows that some of the country’s legislative measures are working.
In the World Economic Forum’s latest annual survey measuring the gender pay gap in 144 countries across the globe, Canada ranked 16, and 1 in the world for educational attainment.
According to the Canadian Government, several contributing factors4 have led to a disparity in wages between men and women. These include:
- Women are more likely to be employed in part-time roles and historically low-paying sectors.
- Women are under-represented in senior leadership positions.
- Women face gender-based discrimination in hiring, promotion and compensation.
- Women conduct a larger share of unpaid work than men.
In Canada the regulation and enforcement of gender pay equity is a provincial responsibility. In Ontario, for example, businesses are governed by the Pay Equity Act5. When the Act was introduced in 1987, the gender wage gap was 36%. Since then it has dropped to 26%.
What’s next for Canada?
The Government has recently tabled new legislation that would model Ontario and Quebec’s equal pay regulations and enforce them at the federal level. It focuses on taking action to benefit women and increase their participation in the workforce. Although this legislation is at a very early stage, it is expected to nudge the needle even further towards equality for Canadians in the coming years, and will hopefully generate growth in the economy that will benefit everyone. What remains clear is that the gender wage gap and pay equity are complex issues with multiple contributing factors, which cannot all be addressed through legislation.
A three-step approach to pay equality
In our experience, gender pay equality can be ensured through a three-step unbiased approach.
- Creating detailed job descriptions.
- Benchmarking salaries based on market rate.
- Assessing salary rates between team members of the same role annually. This takes into account factors such as the number of years with the company, performance reviews and professional designation.
Applying a simple formula to calculate pay equality can ensure that two employees of opposite genders, who share identical professional details, receive exactly the same annual salary.