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

On this page


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

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


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:


The framework of employment equity under the Act

The framework of employment equity:

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

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

Key players:

Accountability, compliance and enforcement for LEEP and FCP employers

The system of compliance under the Act includes:

The role of the Labour Program

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


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:

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:

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

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:

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

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:

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:

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:

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

Data collection and reporting


Recent developments in data collection and gaps

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

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:

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:

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:

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

AustraliaFootnote 52, Northern IrelandFootnote 53, South AfricaFootnote 54 and South KoreaFootnote 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:

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:

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):

The Quebec Human Rights Commission is responsible for:

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:


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.

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: