Policy brief 3: Accountability, compliance, enforcement and public reporting of employment equity

On this page

• Issues
• Background
• Considerations
• Accountability, compliance and enforcement for LEEP and FCP employers
• Data collection and reporting
• Employment equity legislation and policies in other jurisdictions
• Innovative approaches
• Calls for action
• Conclusion

Issues

How to improve accountability, compliance, enforcement and public reporting of employment equity:

• how can the employment equity framework better support employers implementing employment equity and hold them accountable for their results?
• how to improve public reporting of employment equity data and results achieved to better support accountability and public discussion around workplace equity, diversity and inclusion?

The 2 issues above are connected since employer compliance informs reporting and vice versa.

Background

A core objective of the Employment Equity Act (the Act) is to help recognize and remove barriers to employment faced by designated groups and to adopt measures to correct their underrepresentation in the workplace. (Please refer to the Overview and backgrounder).

Accountability, compliance and enforcement and public reporting are key to ensuring the effective implementation of the Act and its goals.^{Footnote 1} Areas for review on how to improve accountability, compliance, enforcement and reporting are:

• communication regarding the benefits of equity, diversity and inclusion to employers (Please refer to the section on “business case for diversity” in the policy brief on Better supporting equity groups)
• division of compliance and enforcement responsibilities between key players
• measurement of employers’ efforts and progress toward equity
• incentives and penalties to help close equity gaps, and
• support for the Government’s efforts to improve equity, diversity and inclusion in the federal public service

Considerations

The framework of employment equity under the Act

The framework of employment equity:

• requires the identification and elimination of employment barriers against persons in the 4 designated groups
• corrects the conditions of disadvantage in employment, and
• promotes the principle that employment equity requires special measures and the reasonable accommodation of differences for the 4 designated groups in Canada

The framework comprises 5 basic elements. It requires that employers:

• analyze the degree of underrepresentation of persons in designated groups in their workforce
• analyze their employment systems, policies and practices to identify all employment barriers against persons in designated groups
• develop and implement a plan to remove these barriers and correct underrepresentation
• improve representation of the 4 designated groups in their workforce, and
• report on efforts made and results achieved

Current division of roles and responsibilities between key enforcement players under the Employment Equity Act

Key players:

• Minister of Labour

  Minister of Labour

  Roles and responsibilities

  Is responsible for the administration of the Act and, via the Labour Program, has the power to:

  • develop and conduct information programs to foster public understanding of this Act and to foster public recognition of the purpose of this Act^{Footnote 2}
  • undertake research related to the purpose of this Act^{Footnote 3}
  • promote the purpose of this Act^{Footnote 4}
  • publish and distribute information, guidelines and advice to private sector employers and employee representatives regarding the implementation of employment equity^{Footnote 5}
  • develop and conduct programs to recognize private sector employers and employee representatives for outstanding achievement in implementing employment equity^{Footnote 6}
  • issue penalties to private sector employers for non-compliance of the Act^{Footnote 7}
  • submit an Annual Report to Parliament on the status of employment equity in the federally regulated private sector (FRPS)^{Footnote 8}
  • make available to employers any relevant labour market information respecting designated groups in the Canadian workforce in order to assist employers in fulfilling their obligations under the Act, and
  • administer the Federal Contractors Program (FCP)

  Products

  The Employment Equity Act: Annual Report:

  • is submitted to Parliament, and
  • consolidates and highlights the employment equity results achieved by the federally regulated private sector employers subject to the Act

  The Employment Equity Data Report:

  • is prepared and posted online every 5 years to coincide with Statistics Canada’s release of census data, and
  • provides information and links to the Open Government Portal, where employers can view and download workforce population or labour market availability (LMA) data

• Labour Program (LP)

  Labour Program

  Roles and responsibilities

  Is responsible for and administers 2 employment equity programs:

  • Legislated Employment Equity Program (LEEP) and employers’ compliance with annual reporting requirements under the Act, and
  • Federal Contractors Program (FCP) and is solely responsible for assessing contractors’ compliance with implementation of employment equity in their workplace

  Is responsible for and administers 2 employment equity initiatives:

  • Workplace Opportunities: Removing Barriers to Equity (WORBE) grants and contributions initiative, and
  • Employment Equity Achievement Awards (EEAA) to recognize outstanding private sector employers and employee representatives^{Footnote 9}

  And, is responsible to provide tools and guidance to employers and contractors to assist them in complying with their employment equity obligations.

  Products

  The individual LEEP employers’ annual statistical forms that are reported to LP are posted online and made available to the public.

  Starting in 2022, LEEP employer’s wage gap data will be posted online.

  LP provides an online Workplace Equity Information Management System (WEIMS) to assist LEEP and FCP employers in meeting their obligations and LP in administering these programs.

  LP provides various tools and guides online.

• The Canadian Human Rights Commission (CHRC)

  The Canadian Human Rights Commission

  Roles and responsibilities

  Is responsible for compliance and enforcement of non-reporting requirements under the Act and:

  • conducts conventional and horizontal audits to assess whether employers are meeting their obligations under the Act^{Footnote 10}
  • supports employers who need guidance and improvement
  • receives and examines complaints regarding non-compliance^{Footnote 11}, and
  • applies to the Chairperson of the Canadian Human Rights Tribunal to request that an Employment Equity Review Tribunal be appointed, with power to issue decisions enforceable as court orders^{Footnote 12}. This application is made when an employer requests a review for a decision issued by the CHRC^{Footnote 13}, or the CHRC requests the confirmation of its decision^{Footnote 14}

  Products

  The Annual Report of the CHRC:

  • is submitted to Parliament, and
  • consolidates information on the CHRC’s employment equity audits and enforcement activities

• Legislated Employment Equity Program (LEEP) Employers

  Legislated Employment Equity Program (LEEP) Employers

  Federally regulated private sector employers, Crown corporations and other federal organizations that have 100 or more employees.

  Roles and responsibilities

  Have the following obligations:

  • survey their workforce to collect data on the representation, industrial sector, geographical location, employment status, occupational group, salary distribution, and shares of hires, promotions and terminations of designated group members
  • identify any under-representation of the designated groups in each occupational group in their workforce
  • review their employment systems including written and unwritten policies and practices in order to identify employment barriers
  • prepare and implement a plan to remove employment barriers and achieve equitable representation^{Footnote 15}, and
  • submit annual employment equity reports to the Labour Program by June 1

  Products

  The LEEP Employer Annual Report:

  • is submitted to the Minister of Labour, via WEIMS to the LP
  • contains the following information:
    • prescribed statistical forms provided by industrial sector, geographical location, employee status (for example, permanent full-time, permanent part-time and temporary), occupational group, salary range, hourly wage gaps, bonus and overtime gaps, hiring, promotion and termination, and
    • a narrative of employment equity activities that the employer conducted, including:
      • measures taken
      • results achieved following these activities, and
      • consultations between the employer and employee representatives

• Federal Contractors Program (FCP) Organizations

  Federal Contractors Program (FCP) Organizations

  Provincially regulated contractors who do business with the Government of Canada that:

  • have a combined workforce in Canada of 100 or more permanent full-time and permanent part-time employees, and
  • have received an initial federal government goods and services contract valued at $1 million or more 

  Roles and responsibilities

  Have the following obligations:

  • collect workforce information
  • complete a workforce analysis and achievement report
  • establish short-term and long-term numerical goals, and
  • make efforts to ensure progress towards equitable representation of the 4 designated groups within its workforce

  Products

  Copies of the workforce self-identification questionnaire as well as the workforce survey return and response rates are submitted to the LP.

  The Achievement Report:

  • is submitted to the LP, and
  • includes workforce analysis results and goals to achieve employment equity

  The updated Achievement Report:

  • is submitted to the LP 3 years after the initial report and every 3 years thereafter, and
  • includes previous data and new workforce analysis results and goals for a subsequent compliance assessment, and information on efforts and progress made to achieve the set goals

• The Treasury Board of Canada (TB)

  TB has delegated its responsibilities under the Act to the Treasury Board of Canada Secretariat -The Office of the Chief Human Resources officer (TBS-OCHRO).

  Roles and responsibilities

  The Treasury Board of Canada is charged with carrying out the obligations of an employer under the Act, in accordance with the Financial Administration Act^{Footnote 16}and, as such:

  • administers employment equity policies as they apply to the core public administration of the Government of Canada (departments under Schedule I and IV of the Financial Administration Act)^{Footnote 17}, and
  • collects annual employment equity reports from separate federal agencies and other public sector organizations (under Schedule V of the Financial Administration Act, the RCMP and the Canadian Armed Forces) for tabling in Parliament, simultaneously with the Treasury Board President’s employment equity report for the core Public Service of Canada^{Footnote 18}

  Products

  The Employment Equity in the Public Service of Canada Report:

  • is tabled in Parliament by the President of the Treasury Board, and
  • consolidates information on the state of employment equity in the federal public service

• The Public Service Commission of Canada (PSC)

  The Public Service Commission of Canada

  Roles and responsibilities

  Is responsible for carrying out the obligations of an employer under the Act, in accordance with the Public Service Employment Act^{Footnote 19}and:

  • promotes and safeguards a merit-based, representative and non-partisan public service that serves all Canadians, and
  • reports independently to Parliament on its mandate

  Products

  The Public Service Commission of Canada Annual Report:

  • is submitted to Parliament by PSC, and
  • consolidates information on employment equity as it relates to staffing processes in the public service

• Separate agencies

  Set out in Schedule V to the Financial Administration Act and that employ 1 hundred or more employees^{Footnote 20}.

  Roles and responsibilities

  Are responsible for carrying out similar employer obligations and, as such:

  • administer employment equity policies as they apply to their employees, and
  • submit annual reports on employment equity to TBS-OCHRO

  Products

  Employment equity annual reports submitted to TBS-OCHRO.

• Employees and unions representatives

  Roles and responsibilities

  Under the Act, have the rights to:

  • be consulted on and collaborate in the preparation, application and revision of the employer’s Employment Equity Plan^{Footnote 21}

  Under the Act, consultation and collaboration between employers and unions are not considered forms of co-management. Final responsibility for compliance rests with the employer.

Accountability, compliance and enforcement for LEEP and FCP employers

The system of compliance under the Act includes:

• reporting obligations: employers have the duty to file reports on the composition of their workforce in relation to employment equity, according to the prescribed forms (refer to section Current division of roles and responsibilities between key enforcement players under the Employment Equity Act)
• compliance audits: the CHRC conducts individual and horizontal compliance audits regarding the employer’s employment policies, systems and equity plans

The role of the Labour Program

The Labour Program assesses employers’ reporting obligations. In addition, the Labour Program:

• develops tools and resources to assist employers in meeting their employment equity duties, and
• provides recognition to private section employers who achieve outstanding results in implementing employment equity

Penalties

Monetary penalties may be imposed upon federally regulated private sector employers that fail to file the required reports. These penalties are issued by the Minister of Labour in accordance with the Act and can be up to $50,000.^{Footnote 22} Under the current framework for reporting compliance, employers reach 100% compliance, meaning that every employer subject to the Act complies annually with their reporting obligations.

Organizations subject to the FCP that do not meet program requirements may lose the right to bid on federal government contracts. Existing contracts may also be terminated. In cases of non-compliance, the Government will place the contractor’s name on the FCP Limited Eligibility to Bid List, which is made public. Currently, there are no contractors on the list.^{Footnote 23}

Labour Program’s initiatives to foster and promote employment equity

The Labour Program also administers 2 initiatives to provide recognition to private sector employers for outstanding achievement in implementing employment equity.^{Footnote 24} These initiatives are:

• The Employment Equity Achievement Award: This is an award that recognizes federally regulated private sector and FCP employers for their efforts in achieving employment equity in the workplace, and
• The Workplace Opportunities: Removing Barriers to Equity (WORBE): This is a grants and contributions program led by the Labour Program. It supports private sector employers, subject to the Act, in their efforts to improve designated group representation through the development of partnerships and industry-tailored strategies

Other governmental departmental initiatives to foster and promote employment equity

Other governmental department initiatives exist to support and foster employment equity. For example, the 50-30 Challenge: Your Diversity Advantage is an initiative between:

• the Government of Canada, led by Innovation, Science and Economic Development Canada, and
• business and diversity organizations aiming at improving access to leadership positions on corporate boards and in senior management for
  • women
  • racialized minorities
  • people who identify as LGBTQ2+
  • people living with disabilities, and
  • First Nations, Inuit and Métis peoples

Organizations participating in the 50-30 Challenge receive the following resources to support them in this program:

• access to the Digital Toolkit, with tailored and industry-specific resources and advice
• connections to partners who specialize in the recruitment of diverse employees
• events where partners come together to recognize corporate leaders who have championed diversity and inclusion in their own organizations, and
• opportunity of becoming a Corporate Diversity Honour Roll Member, which will grant access to government programs, supports, resources and social media promotion

The role of the CHRC under the Act

The compliance audits carried out by the CHRC

The CHRC conducts compliance audits on employment equity plans and employers’ efforts in improving employment opportunities to the 4 designated groups. They cover the following 9 statutory requirements:

• collection of workforce information
• workforce analysis
• review of employment systems, policies and practices
• employment equity plan
• implementation and monitoring of employment equity plan
• periodic review and revision of employment equity plan
• information about employment equity
• consultation and collaboration, and
• employment equity records^{Footnote 25}

In 2018, the CHRC introduced a new horizontal audit model. More specifically, this new horizontal audit model:

• addresses persistent representation gaps for a designated group in particular sectors
• ensures employers have adequate plans to correct under-representation
• identifies specific barriers that impede progress
• gathers best practices and proven special measures that increase representation and help retain employees, and
• shares best practices and proven special measures with employers through the publication of sector-wide reports

In addition, the new audit model focuses on systemic issues faced by designated group members. Each horizontal audit includes a gender-based lens to better understand the situations and experiences of women across designated groups. It also includes a diversity and leadership lens to promote a higher representation of designated group members in management. Therefore, the new audit model takes an in-depth look at the representation and advancement of a specific designated group in a sector. 

Division of responsibilities between the Labour Program and the CHRC

To conduct compliance audits, the CHRC draws from the data collected by the Labour Program to pinpoint whether employers have persistent employment equity gaps. The CHRC also uses the data to build its employment equity forward plan identifying which employers will be audited. The CHRC does not share the results of these audits with the Labour Program due to the confidentiality of information exchanged between the CHRC and the employer. Instead, the CHRC reports on its employment equity audits and enforcement activities as part of its Annual Report to Parliament.

Employment and Social Development’s (ESDC) 2019 Evaluation of the Employment Equity Programs recommended that the Labour Program be provided access to audit reports produced by CHRC. Access to these reports would inform program planning in areas, such as:

• measures taken by LEEP employers to implement employment equity
• results achieved on employment equity, and
• consultations undertaken

Limitations of the current system of compliance with reporting requirements for LEEP and FCP Employers

The aggregation of data at the national level

Currently, reports from individual employers across various sectors (with varying firm sizes and different locations in Canada) are aggregated at the national level. This aggregated approach does not account for variations by firm size and location.

The focus on reporting duties

The reporting compliance rate of 100% does not provide a full picture and is limited in scope. This is because it only applies to private sector employers under federal jurisdiction with at least 100 employees who report annually on their workforce composition as required by the Act. For the 2018 calendar year, 603 employers submitted a report to the Minister of Labour. This represented 771,698 employees, which constitutes about 3.9% of the Canadian workforce.^{Footnote 26}

The 2019 ESDC Evaluation of the Employment Equity Programs found that the current compliance framework for reporting requirements focuses more on report completion rather than employers’ progress implementing and achieving employment equity. Stakeholders have pointed out that this focus on report completion does not inform and drive real change toward workplace equity and has resulted in a gap between policy and practice. Employers meet their reporting duties under the Act and regulations if they provide required information in time.^{Footnote 27}

As such, other indicators (for example, equity plans) are not taken into account in measuring employer progress, given that the results of employers’ individual audits carried out by the CHRC are not made public. The CHRC’s new approach to horizontal audits, which addresses systemic issues and provides leading practices, may help to bridge this gap.

Better support from the Labour Program

The 2019 ESDC Evaluation of the Employment Equity Programs found that employers with no human resources department may have a lower understanding of their employment equity obligations. They may require more support from the Labour Program to meet their obligations. In addition, employers indicated that the Labour Program could facilitate exchanges of leading practices among employers in the same sector.^{Footnote 28}

The system of compliance in the public service of Canada

4 types of actors share the overall mandate to oversee employment equity within Canada’s public service.

TBS-OCHRO has been delegated responsibility to administer employment equity policies as they apply to the core public administration. It holds departments accountable for meeting employment equity targets through the Management Accountability Framework (MAF), which includes employment equity indicators. TBS-OCHRO also relies on surveys of employees to obtain a picture of employees’ perceptions of workplace well-being. Currently, 67 departments and agencies are under the responsibility of TBS-OCHRO.^{Footnote 29}

Separate agencies with 100 or more employees, listed under Schedule V of the Financial Administration Act, are responsible as employers for their employees.^{Footnote 30} They provide to TBS-OCHRO an annual employment equity report. These reports are tabled in Parliament at the same time as the TB President’s report on Employment Equity in the Public Service of Canada. Currently, 20 separate agencies are required to submit employment equity reports.^{Footnote 31}

PSC oversees public service appointment processes, including employment equity and accommodations, through a range of mechanisms including audits, studies and system-wide surveys.

The CHRC is responsible for conducting compliance audits. It can order federal public service organizations to undertake any corrective measures deemed necessary in order to be compliant under the Act.

Initiative to promote employment equity in the public service of Canada

To support federal goals for employment equity and continued efforts toward employment equity, diversity and inclusion, TBS-OCHRO has created:

• The Employment Equity Champions and Chairs Committees (EECCC) and circles consisting of the Persons with Disabilities Champions and Chairs Committee, the Visible Minorities Champions and Chairs Committee, and the Champions and Chairs Circle for Aboriginal Peoples. Their functions include:
  • identifying and eliminating employment barriers for the designated groups
  • ensuring that representation within each occupational group reflects the representation of the employment equity groups in the Canadian workforce, and
  • sharing best practices in employment equity across the public service
• The Joint Employment Equity Committee, comprising TBS, PSC, bargaining agents and departmental representatives, is responsible for undertaking analysis from an employment equity and diversity lens. The Committee may:
  • consider employment equity impacts and implications of policy and practice modifications on the designated groups, and
  • ensure that intersections among designated groups are considered when impacts and implications are assessed

TBS-OCHRO and PSC have also developed targeted outreach, recruitment and onboarding initiatives to increase the representation of the designated groups in the core public administration.^{Footnote 32}

Division of responsibilities between the Labour Program, the TBS-OCHRO and PSC

Regarding the implementation of employment equity, section 42 of the Act provides that the Minister of Labour, via the Labour Program, is responsible for disseminating information, issuing guidelines and providing advice to private sector employers regarding the implementation of employment equity. The Act does not clarify the advisory role that the Minister and the Labour Program could play towards the public service.

In addition, the 2017 Building a Diverse and Inclusive Public Service: Final Report of the Joint Union/Management Task Force on Diversity and Inclusion recommended clarifying the roles and responsibilities of TBS-OCHRO, PSC and CHRC. According to the Task Force report, the clarification of roles and responsibilities could be done by strengthening the enforcement and accountability provisions in the Act. The provisions should specify what these actors are required to oversee, monitor and report regarding their respective obligations under the Act.^{Footnote 33}

Limitations of the current system of compliance in the Public Service of Canada

In 2017, the public service Joint Union/Management Task Force on Diversity and Inclusion reviewed the oversight mechanisms of employment equity. It expressed concerns about a possible reduction of employment equity oversight and therefore recommended that:

• TBS-OCHRO continue to be the central agency responsible for strategic direction and policies related to employment equity, and that it be provided with the necessary resources and a strengthened mandate^{Footnote 34}
• to develop a focused accountability mechanism to measure the government’s work and progress on diversity and inclusion, including the work and progress towards equity, diversity and inclusion of Deputy Heads, executives and managers^{Footnote 35}, and
• PSC strengthen its monitoring of diversity, inclusion and employment equity with regards to staffing, ensuring that diversity, inclusion and employment equity receive due attention as part of a general staffing audit (for example, results of staffing processes could be reported to the Commission on why employment equity criteria were not used where a gap existed)^{Footnote 36}

The 2019 to 2020 PSC’s Audit of Employment Equity Representation in Recruitment also recommended that:

• Deputy Heads should review their staffing framework and practices to ensure barrier-free appointment processes for all employment equity groups, including visible minority sub-populations^{Footnote 37}
• PSC should work with other central agencies and employment equity groups to identify specific factors that impact the success of employment equity groups and visible minority sub-populations within the hiring process and to implement solutions^{Footnote 38}
• PSC should increase its efforts in developing and promoting systems, tools and guidance that support inclusive external recruitment processes, with a focus on the development of barrier-free assessment approaches^{Footnote 39}

Data collection and reporting

Indicators

• Labour market availability (LMA) refers to the share of designated group members in the workforce from which the employers could hire. LMA is derived from the Census and post-census survey on disability conducted by Statistics Canada:
  • the most recent LMA data is from the 2016 Census and the 2017 Canadian Survey on Disability
  • the LMA figures for women, Aboriginal peoples and members of visible minorities include those aged 15 years and over who worked in their chosen occupation in 2015 or 2016
  • the LMA for persons with disabilities figures includes those aged 15 to 64 who worked in 2016 or 2017 ^{Footnote 40}, and
  • the LMA is used to measure attainment rates of private sector employers (LEEP and FCP organizations)
• Workforce availability (WFA) is a subset of the LMA that is used to assess attainment rates in the federal public service. To determine WFA, additional criteria are applied to the LMA population, such as education levels, citizenship and National Occupational Classification code comparisons
• Attainment rate refers to the extent to which representation approaches, meets or exceeds labour market availability. The attainment rate is calculated by dividing the representation by the LMA
• Representation is the share of designated group members in a given labour force (such as the (a) entire federally regulated private sector workforce, (b) the banking and financial services sector and/or (c) an individual bank)
• National Occupational Classification (NOC): The NOC provides a standardized language for describing the work performed by Canadians. It serves as a framework to define and collect statistics, analyze labour market trends and extract career planning information

Recent developments in data collection and gaps

There have been recent changes in reporting for employment equity at the federal level:

• In 2015, the Labour Program changed and simplified the Annual report to focus on data reporting. Changes included simplifying report content to:
  • reflect only the essential requirements laid out in the Act
  • reduce the length of the report, and
  • include sections that highlight employer progress on equity
• In 2018, the Labour Program revised equity measurement to focus on the overall attainment rates of the designated groups in meeting LMA, instead of simple representation rates in employment. The recent adoption of attainment rates as the preferred indicator for reporting aims to focus the narrative on progress, as opposed to gaps in representation
• In 2020, the Regulations Amending the Employment Equity Regulations presented new measures for pay transparency reporting as of January 1, 2021. The federally regulated private sector employers under the Act will be required to record salary data according to a new methodology and include aggregated wage gap information in their annual reporting on employment equity the following year.^{Footnote 41} The pay transparency regulatory change supports data collection to calculate wage gaps, based on an hourly rate of pay, for FRPS employers under the Act

Limitations of the current state of data collection

The voluntary nature of self-identification

Under the Act and the FCP, employers must survey their employees to assess the workforce representation of persons in each designated group. However, employers only count employees who self-identify to the employer, or agree with the employer identifying them as members of an equity group. Private sector employers indicate that voluntary self-identification results in inaccurate reporting about workforce representation of designated groups.

Given the importance of self-identification in measuring representation for designated groups, the quality of self-identification data is crucial. Current data may underestimate the representation of these designated groups in private sector employer organizations subject to LEEP and FCP. They may also misguide efforts to implement employment equity.^{Footnote 42}

In 2018, TBS-OCHRO announced that it was working on modernizing the self-identification processes and forms in the public service. This modernization is meant to capture subgroup data that would allow designing tailored strategies and programs for the members of the designated groups.^{Footnote 43}

In 2021, the Labour Program started a research project to study self-identification of Indigenous peoples, persons with disabilities and members of visible minorities working for LEEP or FCP employers. This project is meant to:

• assess the extent to which Indigenous peoples, persons with disabilities and/or members of visible minorities self-identify to their employers for the purpose of employment equity, and
• understand the underlying factors of potential underreporting and test interventions to address the issue

The limitation of LMA and WFA

The LMA is obtained from censuses and surveys conducted every 5 years by Statistics Canada. As indicated above, the current LMA is based on the 2016 Census and the 2017 Canadian Survey on Disability.^{Footnote 44} As a result, there is a time lag in measuring representation gaps. Employers expressed concerns about being held accountable on the basis of inaccurate data.^{Footnote 45}

The public service of Canada uses WFA estimates to determine its overall representation requirements. However, it takes time to establish representation rates between Census periods and this may result in people management decisions made with outdated information.^{Footnote 46}

The Joint Union/Management Task Force on Diversity and Inclusion expressed concerns regarding the use of WFA estimates by departments and agencies in the public service. WFA estimates do not include permanent residents, recent immigrants, refugees and others who are also part of the population of Canada. The Joint Union/Management Task Force on Diversity and Inclusion recommended that Statistics Canada, in partnership with the TBS-OCHRO and ESDC, address gaps in WFA estimates by:

• developing a methodology to update employment equity WFA estimates between censuses
• preparing demographic and WFA projections to reflect Canada’s diversity, and
• Collecting Census data on LGBTQ2+ people to determine whether this community is under-represented in the workforce, and
• including in WFA estimates, citizens and non-citizens who are living in Canada^{Footnote 47}

The aggregation of data at the national level

There is a need for disaggregated (and inter-group) data collection to better identify the employment barriers that exist for improved representation. For example, women employees aged 25 to 54, according to recent wage gap data from Statistics Canada, earned roughly 88 cents on the dollar compared to men (a wage gap of 12.1% when compared to men in terms of their average hourly wage in 2019). Such type of nuance is absent from aggregated employment equity data. The Regulations Amending the Employment Equity Regulations that introduced new measures of pay transparency reporting may help bridge that gap.

In addition, employers expressed their concerns about being compared to other organizations, in their sector, of significantly different size and scope. For example, smaller companies in the banking system are compared to large national banks. National banks have branches across the country, which may help to employ more members of the designated groups, while a smaller organization may concentrate its workforce in one geographical location.^{Footnote 48}

The limitation of NOC codes

LEEP and FCP employers’ annual reports provide statistical information regarding the representation of members of the designated groups by occupational groups, according to the NOC codes established by Statistics Canada and Employment and Social Development Canada.

Employers indicated that no appropriate NOC codes existed for many of the positions in their industries and sectors. Therefore, they are held accountable for gaps in labour force availability for the assigned NOC code, which may not be a reflection of the actual labour force availability for the given position.^{Footnote 49}

In addition, several employers indicated that some of the NOC codes are so broad that they cover everything from recent graduates to experienced employees.^{Footnote 50} This may mislead the comparison of salary data across groups.

The limitation of the representation gap

Many factors determine the representation of designated groups, including:

• a diverse environment in the workplace
• the employers’ geographical location
• the economic environment (for example, the COVID-19 pandemic context may impact on employment barriers), or
• personal choices of job seekers who may not wish to work in particular sectors or industries

Therefore, employers can have large representation gaps despite their sustained efforts to remove barriers to employment. Due to factors beyond their control, some employers can meet or surpass labour market availability levels despite making little effort to remove these barriers.

Employment equity legislation and policies in other jurisdictions

At the international level

Since the adoption of the Act in 1986, Canada has been an international leader in the area of employment equity.^{Footnote 51}

Australia^{Footnote 52}, Northern Ireland^{Footnote 53}, South Africa^{Footnote 54} and South Korea^{Footnote 55} have implemented employment equity programs similar to Canada.

A comparative analysis of these employment equity-like programs (EE-like programs) that share 2 key features. They require employers to:

• report on the representation of the identified group(s), and
• develop plans to increase their representation where it falls short of certain numerical targets or set standards

All but one of the programs reviewed (South Africa), give a proactive role to the overseeing agency. Depending on the level of under-representation, this role includes:

• giving advice to companies considered to be lagging in representation (Australia)
• providing feedback on the plans submitted by employers (Northern Ireland and South Korea), and
• entering into agreements with these companies to make changes to their human resources practices (Northern Ireland)

These programs have had some impact towards the intended outcome of reducing underrepresentation. However, it is difficult to quantify the magnitude of the impact due to the lack of comprehensive studies.

At the domestic level (provinces and territories in Canada)

As noted, the Act applies to federally regulated private sector employers and the federal public service. At a sub-national government level in Canada (provinces and territories), employment equity legislation and policies are inconsistent.

In general, human rights legislation across Canada protects the right to be free from discrimination. Provincial human rights commissions publish annual reports on their activities, including quantitative information on complaints and discrimination. The majority of the complaints registered every year relate to discrimination in employment.^{Footnote 56}

Few provinces have adopted employment equity legislation based on or similar to the federal Government’s proactive and comprehensive employment equity model, found in the Act.^{Footnote 57}

The province of Québec adopted the Loi sur l’accès à l’égalité en emploi dans des organismes publics. This law applies to 5 designated groups working in public organisations with 100 or more employees (for example, education and healthcare systems):

• women
• Indigenous people
• visible minorities
• ethnic minorities, and
• persons living with disability

The Quebec Human Rights Commission is responsible for:

• collecting employers’ data, and
• reporting every 3 years on the attainment and representation rates of the 5 designated groups

The territory of Nunavut ratified the Nunavut Agreement in 1993. The objective of the Agreement is to increase Inuit participation in government employment in the Nunavut Settlement Area. Within 3 years of ratification, each government organization was required to prepare an Inuit employment plan with the goal to increase and maintain the employment of Inuit at a representative level. An implementation panel publishes the findings of its independent review in an annual report.

The province of Ontario repealed its Employment Equity Act in 1995, only 2 years after its adoption. The province of British Colombia did the same in 2003.^{Footnote 58}

Innovative approaches

Innovative approaches to reporting on equity have emerged in the recent years. For example, “comply or explain” models are used in some jurisdictions and countries (for example, Ontario Securities Commission, United Kingdom, Germany and the Netherlands). These models intend to promote equity groups’ representation in managerial positions.

The “comply or explain” approach suggests that regulations (for example, workforce quotas) prevent innovative entrepreneurship since they place an administrative burden on employers. To reduce the regulatory burden, some jurisdictions allow companies not to comply with their employment equity obligations. However, they have to explain publicly why they did not comply. The assumption is that the market would adapt naturally and “sanction” non-complying companies.

Calls for action

Given these considerations, many stakeholders have called for measures to improve employment equity compliance and public reporting, including:

• stricter enforcement and the increased use of penalties to address non-compliance with employment equity obligations (for example, monetary penalties for failure to implement employment equity plan)
• increased funding and capacity of regulators, including the auditing and enforcement functions of the CHRC
• innovative and new ways to make employers directly accountable for employment equity results (refer to section on Innovative approaches)
• improved FCP accountability by requiring employers to report on their employment systems reviews. They would also report on their employment equity plans, goals and results on a regular basis
• improved system of data collection and analysis to forecast Canada’s future representation gaps (for example, by collecting disaggregated data in the self-identification forms in order to better reflect barriers to employment faced by certain sub-groups), and
• improved Government leadership in encouraging employers to share best practices

Conclusion

This document has outlined some background and considerations that the Task Force can take into account as its members engage stakeholders on the issues of employment equity accountability, compliance, enforcement and reporting.