Although the gap between men's and women's wages has been declining in Canada since the late 1990s, thanks to women now occupying positions in industries where they were previously underrepresented, men's hourly earnings are still higher than women's.
And while each industry is different, market opportunities and discrimination, coupled with demographic group affiliation, continue to shape the pay gap in Canada. How does the average hourly wage vary? Industry, occupation, social patterns, and, of course, government initiatives affect pay differences; let's explore them.
Defining Equal Pay and Pay Equity
Equal Pay vs. Pay Equity
Both fall under the umbrella of labour rights, but the definitions of Equal Pay and Pay Equity differ. Equal Pay refers to people receiving the same salary for the same work, while Pay Equity refers to reducing pay inequality, even for different jobs of equal value or rank.
Equal Pay aims to ensure that a junior civil engineer receives the same salary as a colleague in the same company. Pay Equity seeks to enable women to access leadership positions in sectors where their participation is almost nonexistent, or, for example, to ensure that a receptionist has the same working conditions as an administrative assistant.
Some of the differences include:
💰 Equal Pay
- Its objective is to avoid gender-based differences in direct Pay.
- Men and women should receive the same salary when performing the same or substantially identical work, with similar responsibilities and conditions.
👫 Pay Equity
- It seeks to correct structural inequalities in professions historically assigned to women. Pay Equity aims to ensure that employees are evaluated based on their skills, effort, and responsibilities under the same working conditions.
- It seeks to provide equal Pay for different but equally valuable jobs, working in practice to balance that value.
- It requires formal processes such as pay equity plans, evaluations, and periodic reviews.
Importance of Pay Equity
Women's participation in the workforce is undeniable; while social norms have evolved, allowing women access to other educational and, consequently, employment opportunities, truly good opportunities continue to favour men.
That is why Pay Equity aims to reform the systems that traditionally prevent women from accessing good positions, thereby reducing the gender wage gap and achieving economic justice.
Among the obstacles we can find is, clearly, the cost of childcare (which prevents many mothers from participating in the labour market). For example, according to government studies, specifically the 2017 Women and Paid Work: A Gender-based Statistical Report, Quebec's gender employment gap was lower than Ontario's, attributed to Quebec's universal low-fee childcare program, the lowest in the country, which allows parents to truly benefit from choosing to work.
Based on LFS data, women's labour force participation increased from 21% to 82% between 1950 and 2015. Events such as the post-war period, the birth control pill, and even the possibility of divorce facilitated women's entry into the labour market.
The Current State of the Gender Pay Gap in Canada
Statistical Overview
One thing is certain: while there is progress, there is a persistent inequality between men's and women's earnings in Canada, and of course, in access to leadership positions.
According to the latest data from official sources, women hold only 36% of managerial roles in Canada (the same is true for legislative positions). Although the wage gap is narrowing, by 2025, women in Canada aged 15 and older will earn approximately 88 cents for every dollar men earn (only 5 cents more than in 1997).
The importance of pay equity is reflected in data from Statistics Canada, which reported in 2023 that gains in education, job tenure, and women’s entry into traditionally male occupations have helped narrow the gender wage gap. This gap, however, is experienced differently by minority groups.
Although Canada is characterized by its multicultural nature, the gender wage gap is not experienced equally in Canada: immigrant women who arrived as adults faced the largest gap in 2022, earning 20.1% less than men.
Another affected minority is clearly Indigenous women, who earned 21 cents less per hour than non-Indigenous women, and these figures are very recent, from 2025 only. Black, Indigenous, and disabled women experience an even larger wage gap than the Canadian average.
between men and women.
Factors Contributing to the Wage Gap
There are persistent barriers that prevent women from advancing and reduce wage gains in Canada, even leading to resignation. Limited educational opportunities, on-the-job training, and representation in leadership and executive positions hamper women's participation in the labour market. Added to this are factors such as motherhood and the continued burden of family care.
The uneven distribution of men and women across occupations also contributes to the slow reduction of the wage gap, as women are unable to access higher-paying jobs. These gaps tend to narrow when women are unmarried and childless. They are also often influenced by social trends such as low fertility rates and men's increasing involvement in household duties.
Women also have to constantly prove they are equally qualified and work harder to secure their positions. Studies such as the 2021 report, "Gender-related differences in the career advancement of women in Canada," show that, compared with men, women are more willing to work hard and more likely to recognize others' contributions.
Even in professions like caregivers—one of the most in-demand and essential in Canada—where women make up the majority of the workforce, there are differences. Men have higher employment incomes because, even within this group, the distribution of professions influences compensation.
While men access positions such as janitors, building superintendents, or teachers, women, in addition to nursing, also hold positions such as nurse aides or patient service associates.
Discrimination against women in the Canadian workplace is directly visible due to factors like race and age, which can even hinder promotions. Reducing the gender gap in the labour market must be viewed from multiple perspectives, as many factors still affect women's professional growth.
Legislative Framework for Pay Equity in Canada
The Pay Equity Act
Equal Pay for men and women does not guarantee a reduction in the gender wage gap. To address this, the Canadian government aims to correct this systemic discrimination through practices and systems that promote equal compensation for work of equal value.
Just because a job is considered "feminine" does not mean it should be valued or paid less. In fact, the goal is to remove this label, as every Canadian has the right to experience workplace compensation practices that are free from gender-based discrimination.
Effective since 2021, the Pay Equity Act requires federally regulated employers with 10 or more employees to proactively ensure pay Equity and applies to approximately 5,000 federally regulated employers and 1.4 million employees. Among its most important points are:
Section 11 of the Canadian Human Rights Act protects companies with fewer than 10 employees and territories where the Pay Equity Act does not apply, such as the Yukon, the Northwest Territories, Nunavut, and Indigenous governing bodies.
Employer Obligations Under the Act
Fairly rewarding the effort and responsibility of women, regardless of their work sector, is one of the most important reasons for monitoring the Pay Equity Plan. The plan must be proactively implemented:
- Employers must first develop a pay equity plan and address any gaps, and it must be updated every 5 years.
- They must classify positions, identify which jobs are commonly performed by women and men, and balance these job categories based on skills and effort to ensure equal conditions. If unjustified pay differences are found, the employer must adjust compensation.
- Companies with more than 100 employees or that are unionized must make reasonable efforts to establish a pay equity committee.
- As mentioned, the monitoring and enforcement of these actions are overseen by a Pay Equity Commissioner, who is required to submit annual updates to ensure compliance with the plans.
Role of the Pay Equity Commissioner
A Pay Equity Commissioner is more than just an administrator and monitor of compliance with pay equity plans; they also play a role in creating and updating employers' plans under the Pay Equity Act. The Pay Equity Commissioner's main responsibilities include:
Steps Toward Achieving Equal Pay
Employer Initiatives
What are the main obstacles preventing fair compensation between genders? How can we know if our company offers equal Pay for work of equal value? That is one of the main tasks of employers: to identify these obstacles before they become systemic or require the intervention of a labour and employment lawyer.
Some of the initiatives that employers must implement under the Pay Equity Act to achieve a sound restructuring of their compensation plans and avoid gender wage disparities are:
- 📊 Employers must consistently calculate and compare compensation. Employers or pay equity committees must calculate compensation for each job category objectively and comparably, typically expressed on an hourly basis, to identify pay gaps.
- 👨🏻💻👩🏻💻 Promote inclusive workplace cultures that value diversity and Equity: Inclusive environments help reduce structural barriers that particularly affect feminized occupations.
- 📩 Transparency: Greater transparency allows for the identification of unjustified pay differences and improves accountability; sharing relevant employment information also strengthens employee engagement.
- 💰 Train managers and HR staff on pay equity obligations and bias awareness; education helps prevent inconsistent salary decisions and discriminatory practices.
- 💲 ⚖️Monitor workforce data and identify emerging pay inequities over time; this strengthens organizational accountability and helps maintain long-term pay equity.
Compensation includes salary, bonuses, commissions, paid vacation, severance pay, pensions, insurance, and other direct or indirect benefits provided by the employer.
Government Actions
Pay Equity in Canada is a topic under constant government scrutiny to detect potential non-compliance. The government works in conjunction with the Office of the Pay Equity Commissioner to strengthen the delivery of progress reports, plan compliance monitoring, and mechanisms for resolving disagreements.
In recent years, Canada has focused on implementing an efficient system for tracking the progress of related actions. For example, it has implemented an official portal to facilitate and standardize the submission of annual reports, which the Pay Equity Commissioner verifies to demonstrate ongoing compliance and progress.
Individual Advocacy
One of the fundamental rights of workers in Canada is the right to understand how labour laws apply in their workplace. This includes, of course, the value placed on their work and fair Pay.
Among the rights workers have under the Pay Equity Act is the right to participate actively in discussions about pay processes. This helps promote transparency and compliance, allows workers to review preliminary plans, and enables them to provide feedback on any draft pay equity plans.
The employer's ongoing participation and transparency within the Pay Equity Act provides workers with an opportunity to maintain pay equity in the long term.
Likewise, they can participate in Pay Equity Committees when representation opportunities exist (it is not necessary to be unionized; they can still have formal representation on pay equity committees), participate in training and workplace education opportunities on pay equity, and get involved in long-term monitoring of workplace pay equity practices. Just as they can engage in arguments, they have the right to raise their hands and raise their concerns when:
- Compensation practices appear inequitable.
- They want to report retaliation or unfair treatment related to participation in pay equity.
- Want to file objections if the pay equity process was not followed properly.
Challenges and Future Directions
Persistent Barriers
The willingness shown by many companies and their legal obligation to reduce the gender wage gap and to participate in the Pay Equity Act are positive developments; however, resources are not always sufficient to implement and consistently monitor these plans.
Some of the obstacles companies in Canada face when they lack the resources for proper Pay Equity implementation include:
Moving Forward
One of the most important aspects of the Pay Equity Act is the transparency of employees' actions. Thanks to the Pay Equity Commissioner's 2024-2025 Annual Report, we can see which companies have received training on the topic, how many have joined in recent years, what new resources employers have to create and monitor plans, and even access information on formal disputes (which, for example, have been increasing) or significant changes in areas such as administrative monetary penalties.
The Office of the Federal Pay Equity Commissioner provides employers with tools to encourage training and help them avoid future violations, supporting them and working together toward wage equality.
Along with the Pay Equity Portal, more employers can access resources to create pay equity plans effectively and efficiently. Currently, there are free online courses, offered in collaboration with Université TÉLUQ, that provide employers with tools to comply with their obligations, learn about annual statements, plan creation, and compensation.
References
- Canadian Human Rights Commission. Promoting compliance with the Pay Equity Act (26-05- 2026). Available at: https://www.chrc-ccdp.gc.ca/our-work/promoting-compliance-pay-equity-act#about-pec (Accessed: May 2026).
- Canadian Human Rights Commission. The Pay Equity Commissioner's 2024-2025 Annual Report (27-05- 2026) Available at: https://www.chrc-ccdp.gc.ca/resources/publications/pay-equity-commissioners-2024-2025-annual-report?(Accessed: May 2026).
- Government of Canada. Gender-related differences in the career advancement of women in Canada (22-09- 2021). Available at: https://www150.statcan.gc.ca/n1/pub/36-28-0001/2021009/article/00002-eng.htm (Accessed: May 2026).
- Government of Canada. Women working in paid care occupations (January 2025). Available at: https://www150.statcan.gc.ca/n1/pub/75-006-x/2022001/article/00001-eng.htm (Accessed: May 2026).
- Government of Canada. Pay Equity Act. (13-12- 2018) Available at: https://www150.statcan.gc.ca/n1/pub/36-28-0001/2021009/article/00002-eng.htm (Accessed: May 2026).
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