The gender wage gap continues to persist in Canada, despite the fact that pay transparency and pay equity laws have recently come into effect federally and in some provinces. While there are now greater protections against salary disparities for some Canadians, there is still room for improvement.

Consider that in 2020, women in Canada earned 0.89 cents for every dollar a man earned, which is equivalent to a $3.52 hourly wage rate gap between men and women.1

Pay transparency is the employer practice of disclosing compensation standards to employees and job candidates, to ensure fair pay. Pay equity is a legal concept that equal work deserves equal pay, regardless of one’s race, gender identity, ethnicity or age. Moreover, compensation practices for pay equity should be fair, unbiased, ethical and non-discriminatory. 

So, how will pay transparency and pay equity laws affect employers and employees? ivy Group combed through the latest provincial and federal legislations to decode the laws and regulations you need to know about now. 

Federal Level

The federal government’s Pay Equity Act came into force on August 31, 2021.2 The Act established a proactive pay equity regime for federally regulated workplaces with 10 or more employees.The Act ensures that men and women working in federally regulated public or private sector workplaces, parliamentary workplaces and the Prime Minister’s and Ministers’ offices, receive equal pay for work of equal value. Employers will also have to proactively examine their compensation practices and establish and update a pay equity plan.3

Pay transparency measures on a federal level were incorporated into the Employment Equity Regulations, which went into effect in January 2021. In an effort to raise awareness of wage gaps, federally regulated private sector employers with 100 or more employees are now required to divulge aggregate pay gap information in their yearly employment equity reports.4

Provincial Level

To date, six Canadian provinces – Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Ontario and Quebec – have enacted pay equity legislation.5

Pay transparency laws have taken effect in British Columbia, Nova Scotia and Prince Edward Island. Pay transparency legislation has also been introduced in Newfoundland/Labrador, Manitoba and Ontario, but these legislations have either been shelved or not yet been enforced in these provinces.

In Ontario, the Pay Transparency Act (if enacted) would prohibit employers from seeking a job applicant’s pay history, however they would be able to seek information about pay ranges or aggregate pay provided for comparable positions. For publicly advertised jobs, employers would need to list the expected compensation amount or range, and employers with 100 or more employees would need to prepare an annual pay transparency report. Employers in Ontario would also be prohibited from disciplining employees for asking about their pay, for disclosing their pay to another employee, or for asking about pay transparency information.6

Additionally, Ontario has an active Pay Equity Act that requires all public and private sector employers with 10 or more employees establish and maintain specific pay equity standards to help close the gender wage gap.7

In British Columbia, the Pay Transparency Act to improve pay equity and transparency was passed on May 11, 2023.8 Employers in British Columbia are now required to address systemic discrimination in the workplace, disclose pay or pay range information (beginning November 1, 2023), and follow reporting obligations. The Act also prohibits employers from asking for pay history information from a job candidate. It also prohibits reprisals against employees for inquiring about their pay to their employer or for revealing their pay to another employee or a job applicant. Additionally, employers above a certain size will be required to complete and post annual pay transparency reports.9

While there are no pay transparency laws in Quebec, the province’s Pay Equity Act requires that employers with 10 or more employees take part in a pay equality exercise to identify and adjust for gender-based pay differences for similar positions. After the exercise is completed, employers are required to share the results with their employees. The Act also requires that qualifying Quebec employers perform a pay equity audit every five years to ensure new wage gaps have not been created.10

What’s Next?

Employers that meet the criteria for federal or provincial regulations will need to confirm compliance with existing legislation and stay abreast of future developments. It’s also wise for employers to review their compensation practices on a regular basis to ensure equity and consistency in pay across different groups of employees. 

With a growing demand for pay transparency and pay equity laws, provincial and federal legislations are expected to evolve or take effect in other provinces in the coming years. Companies are advised to keep a close eye on these regulatory changes in order to comply, adapt and improve their hiring processes.