Magazine article Government Finance Review

Canada's Experience with Pay Equity: National and Provincial

Magazine article Government Finance Review

Canada's Experience with Pay Equity: National and Provincial

Article excerpt

Concerns that the wage-setting practices of the federal government of the United States may be resulting in pay discrimination for women and minorities prompted the Congress to determine how possible pay disparities could be eliminated. Thus the Congress requested that the U.S. General Accounting Office (GAO) undertake a major study of public-sector activities related to equal pay for work of comparable value.

In a report released in November 1993, the GAO reviews the pay-equity initiatives of Canada and their results to date. Canada has legislated a pay-equity system for federal employers. In addition, the provincial government of Ontario passed pay-equity legislation applying not only to public-sector employers but also to most employers in the private sector.

The Canadian Human Rights Act (CHRA), passed in 1977, and the Ontario Pay Equity Act (OPEA), passed 10 years later, require that employers provide equal pay for men and women serving in comparable positions. In both cases, a comparable position is determined by assigning the job a "value." Employers use the same set of factors-skill, effort, responsibility and working conditions-to determine the job's value.

Although specific elements of the two acts are different, the basic structure of enforcement is the same. Complaints of pay inequity coming from employees or from the federal/provincial labour department are directed to a CHRA- or OPEA-established commission. The agency accepts and investigates pay-equity complaints, as well as provides public education. When a settlement cannot be negotiated by the commission between the complainant and the employer, the commission directs the complaint to a tribunal, which essentially acts as arbiter.

At the National Level

Section 11 of the 1977 Canadian Human Rights Act prohibits employers in the federal sector from establishing or maintaining differences in wages between men and women who are doing work of comparable value. Section 11 covers approximately 5,500 employers with approximately 1.1 million employees (9.4 percent of the Canadian workforce). As indicated in Exhibit 1, most of the employees covered are with the Canadian public sector or work for federally regulated employers (45 percent and 44 percent, respectively). The remainder are employees of crown corporations.

Exhibit 1

EMPLOYEES COVERED BY PAY-EQUITY LEGISLATION IN CANADA AND ONTARIO

Canadian Human Rights Act

Employees of the Canadian public sector                           512,000
Employees of federally regulated employers                        500,500
Employees of crown corporations                                   132,500

Total covered employees                                         1,145,000

Ontario's Pay Equity Act(*)

Employees of Ontario's public service                              89,000
Employees of private-sector companies with 10 or more
 employees and employees of the nonprovincial public service      769,000

Total covered employees                                           858,000

* Figures for Ontario are prior to 1992 amendment.

Within the first 10 years of the legislation's enactment, the Canadian Human Rights Commission received 78 pay-equity complaints, only five of which remained unresolved. In 1988, however, 120 complaints were received by the commission. This burst of complaints fell within a year of Ontario's pay-equity legislation. Since the 1988 surge, the number of complaints has hovered around 20 per year. As of the end of 1990, 164 of the 241 complaints received had not been resolved. Of the cases that were closed by 1990, the commission had mediated 28 complaints, while seven were referred to a tribunal. Thirty-six were dismissed by the commission and six were withdrawn by complainants.

By the end of 1992, Canada's federal government had paid more than Can$500 million (approximately U.S.$375 million) in one-time and recurring pay-equity adjustments to approximately 74,000 men and women (about 25 percent of the public service). …

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