An Afternoon with Minister Hajdu – A Fireside Chat on Proactive Pay Equity Legislation

By Declan Ingham

Photo Credit: Victoria Heath and the Institute for Gender and the Economy

We live in a patriarchal society, what’s wrong with saying that?”

These are not the words of a typical cabinet minister, but Patty Hajdu, Canada’s Minister of Employment, Workforce Development and Labour, may not be a “typical” cabinet minister. She offered this premise to an assembly of University of Toronto students in October who gathered to hear her speak candidly on Bill C-86, specifically the Act to Establish a Proactive Pay Equity Regime within the Federal Public and Private Sectors, but also the amendments to the Canadian Human Rights Act (CHRA) and the Parliamentary Employment and Staff Relations Act (PESRA). This legislation will come into force by December 2021 and impose new pay equity laws on all federally regulated employers with ten or more employees to eliminate wage discrimination (i.e. the financial undervaluing of work performed by women relative to men).

The “fireside chat” was hosted by Sarah Kaplan, the Director of the Institute for Gender and the Economy. Hajdu proved to be thoughtful, passionate, and capable – easily switching topics from the underpinnings of the wage gap, to the politics of activism, to the political theory underlying the Liberal Party’s governing agenda. Her ability to articulate the nuances of social policy is unsurprising given her considerable experience previously working on issues such as the social determinants of health and homelessness as the director of Northwestern Ontario’s largest homeless shelter.

Much of the talk focused on the complex policy problem of the gender pay gap: the divergence in earnings between men and women. Yearly earnings data in 2017 show full time female workers earn 74.2 cents for every dollar that their male counterparts made. The gender pay gap exists in every province and in almost every major occupational group in Canada. As a result, Canada’s World Economic Forum global gender gap ranking has tumbled from 19th to 35th place in the past two years, and critics – both nationally and globally – have noted the lack of progress. There are, of course, significant and varied factors behind gender pay disparity. The gap may be partially explained by the fact that full-time male workers work more hours than full-time female workers (although, even when controlling for this imbalance, women still earn only 87.9 cents on the dollar as of last year). The higher prominence of women in part-time work, women’s expected role in elder or child-care, and the higher probability of men being employed compared to women (85.3% vs. 77.5% in 2015) also affect gender pay gap statistics. Another factor is the overrepresentation of women in low-paying occupations where 56.1% are employed in professions such as teaching, nursing, social work, clerical, or sales and services (which only employ 17.1% of male workers) and women’s underrepresentation in high-paying positions such as STEM fields like natural and applied science occupations where they are outnumbered by male workers nearly three-to-one. Nevertheless, analysis from Statistics Canada notes that the gender wage gap is “largely a function of wage inequality between women and men in the same occupations.”

Even when appraising these “mitigating factors” of the gender pay gap, it is obvious that most of them also have roots in sexism, bias, and stigma or – as the Minister stated – patriarchy. The pay disparity between men and women is situated within our historical context which structured the relation between gender and the labour market and solutions can be found through restructuring this relationship  For example, the gender difference in working hours can be understood as the social outcome of a gendered division of labour within households, while time-off penalties for pregnancy could be controlled through greater provisions of paternity leave.  

The legislation broadly aims to accomplish three central policy measures: implementing a pay equity regulatory regime for employers, instituting a new regulator in the form of the Pay Equity Commissioner, and the establishment of a full Department for Women and Gender Equality.

The first policy measure attempts to tackle wage discrimination directly by compelling employers to take steps to guarantee equal pay for work or equal value. Starting as of December 2018, employers with ten or more employees have three years to establish and submit a pay equity plan to the Pay Equity Commissioner. The plan must identify job classes in their workplace and, within each class, indicate the gender ratio, evaluate the value or work performed, identify class compensation, and compare these to job classes of similar value. After this analysis, employers are required to set out the results of this comparison, identify female dominant classes that require an increase in compensation, and set deadlines to increase compensation. By reviewing and updating these pay equity plans every five years, any gaps that may have emerged can be identified and addressed. It is important to note that the plans will not analyze compensation within job classes – an omission that risks overlooking what Statistics Canada data suggests is a key driver of gender-based wage inequality.

 Enforcement will be handled through a newly created Pay Equity Commissioner within the Canadian Human Rights Commission. The Commissioner will be responsible for educating employers regarding pay equity and enforcing compliance through audits, investigations, dispute resolutions, remedy orders, and administrative monetary penalties. Government decision-making in regards to gender will also get a boost as the federal department formerly known as Status of Women Canada, will become a legally-entrenched Department for Women and Gender Equality mandated to “advance equality in respect of sex, sexual orientation, or gender-identity expression”.

The Pay Equity Act is the latest measure in the Liberals’ broader feminist policy agenda. However, listening to Hajdu made it clear that this legislation is a step in the longer political process of influencing the dialogue regarding jobs, labour, and gender. Compelling employers to appraise their job classifications forces both a discussion of gender and work at each workplace but also targets the problem of devaluing work predominately done by female workers. Similarly, the proactive regulatory approach shifts the burden of complaining off of individuals, and tackles the problem of power imbalances, asymmetric legal capabilities, and social risks in exercising legal rights.  The forceful policy instruments at play will help cement this policy objective into the broader policy architecture of Canadian social policy, and consciously guards against possible backlash and future government backpedaling.  

 By the end of the talk, it was clear that Ms. Hajdu is an exemplary “Trudeauvian” minister. Her focus on “levelling the playing field” and crafting progressive-but-pragmatic policies flow naturally from the Liberal Party’s governing philosophy. The marketing of these policies demonstrate the Liberal preference for incorporating “universality” into political discourse: interweaving concerns of equity and social justice with appeals to the universal aspirations (and benefit) of all Canadians. Let us hope – for the sake of ending the gender pay gap at least – they have been successful.

Declan Ingham is a year one Master of Public Policy candidate at the University of Toronto’s Munk School of Global Affairs and Public Policy with an Honours Bachelor of Social Sciences from the University of Ottawa. With a view to transforming the Canadian policy environment, Declan studies social, urban, economic, and labour policy alongside foreign affairs, electoral politics, and political philosophy. When not studying public policy or politics, Declan is busy living it by exploring Toronto and waxing poetically on the topics du jour.