Backgrounder: New pay gap reporting measures in federally regulated workplaces

These new pay gap reporting measures will raise awareness of wage gaps experienced by women, Indigenous people, persons with disabilities and members of visible minorities working in federally regulated workplaces. By releasing data on wage gaps, the Government of Canada expects these measures to:

• help reduce wage gaps;
• shift business culture and expectations toward greater equality; and,
• lead to better outcomes for workers and their families.

These new measures apply to federally regulated private sector employers with 100 or more employees covered by the Employment Equity Act and place Canada as the first country to make this information for the four designated groups publicly available.

Legislative amendment
In Budget 2018, the Government announced $3 million over 5 years, starting in 2018–2019, to address wage gaps in the federally regulated private sector through pay gap reporting measures. Further to this commitment and following consultations with stakeholders, the Government introduced an amendment to the Act as part of the Budget Implementation Act, 2019, No. 1 (Bill C-97), which received royal assent on June 21, 2019.

Regulatory amendments
To implement pay gap reporting, amendments to the Employment Equity Regulations were necessary.

To direct the approach to the regulatory amendments, the Government held in-person consultations and made an online questionnaire available to employers, employer representatives and stakeholder groups in winter 2019, including:

• unions;
• special interest groups;
• industry associations; and
• representatives of provincial and municipal orders of government.

This initial feedback informed the development of the proposed Regulations Amending the Employment Equity Regulations, which were published in Part I of the Canada Gazette on August 10, 2019. The comments received during the 30‑day consultation period allowed the Government to make minor amendments and finalize the Regulations. The Regulations Amending the Employment Equity Regulations were published in Part II of the Canada Gazette on November 25, 2020.

Coming into force
The legislative amendment to the Act and the Regulations came into force on January 1, 2021, through an order-in-council

As of January 1, 2021, federally regulated private sector employers covered by the Act are required to report their salary data in a way that shows aggregated wage gap information. This new salary data will be included for the first time in their annual reporting on employment equity[1] on June 1, 2022 (capturing 2021 calendar year data).

Aggregated wage gap information will be released through an online application (in development), which will provide comparable data on representation rates and designated group wage gaps by employer. The first release of wage gap information is expected for winter 2023.

In line with the Act, the new salary data will enable employers to determine their employees:

• hourly rate wage gaps;
• bonus pay gaps;
• overtime pay gaps; and
• overtime hours worked gaps.

The Regulations also include a number of administrative amendments to modernize and streamline the Regulations as well as update references to other legislation.

Employers are encouraged to consult online resources or to reach out to the Labour Program at 1‑800‑641‑4049 if they need assistance understanding the new reporting requirements.

Statistics on gender wage gap in Canada

According to Statistics Canada, female employees aged 25 to 54 earned 88 cents on the dollar compared to men in terms of their average hourly wage in 2019, representing a wage gap of 12.1%.

In federally regulated private sector workplaces
According to the Employment Equity Act: Annual Report 2019, employees in permanent full‑time positions earned:

Less than $50,000
a)   30.7% of women compared to 20.6% of men
b)   36.5% of Aboriginal women compared to 22.5% of Aboriginal men
c)   32.1% of women with disabilities compared to 22.2% of men with disabilities
d)   31.9% of visible minority women compared to 24.0% of visible minority men

$60,000 or more
a)    50.1% of women compared to 64.4% of men
b)    42.9% of Aboriginal women compared to 62.5% of Aboriginal men
c)    48.1% of women with disabilities compared to 61.6% of men with disabilities
d)    49.8% of visible minority women compared to 60.4% of visible minority men

$100,000 or more

a)   15.5% of women compared to 24.2% of men
b)   10.2% of Aboriginal women compared to 20.5% of Aboriginal men
c)   13.4% of women with disabilities compared to 21.4% of men with disabilities
d)   15.1% of visible minority women compared to 21.4% of visible minority men

[1] Each year, employers are required to file an employment equity report with the Minister of Labour as required by the Act. The report includes five forms: representation data; employee occupational groups; employee salary ranges; the number of employees hired, promoted and terminated; and a narrative.