Pay Equity Committee on March 21st, 2016

[The Chair, Liberal, Anita Vandenbeld]

I'm going to call the meeting to order because we have a limited amount of time today. As we know, the bells are going to start for the votes at 6:15 p.m.

I would like to thank the witnesses who are here today. We have Professor Beth Bilson and Professor Marie-Thérèse Chicha.

Thank you very much for being here on short notice.

You each have 10 minutes to speak. I will begin, for 10 minutes, with Professor Chicha, followed by Professor Bilson.

We'll begin your opening words.

[Prof. Marie-Thérèse Chicha, Former Member, Pay Equity Task Force and, Professor, School of Industrial Relations, University of Montreal, As an Individual]

Thank you, Madam Chair.

Members of the Special Committee on Pay Equity, thank you very much for inviting me today. It's a tremendous honour to appear before you.

I am a professor at the Université de Montréal's School of Industrial Relations, as well as the university's ethnic relations chair. Further to my contribution to gender equality in the workplace, particularly in the area of pay equity, I had the honour of receiving the Governor General of Canada's Award in the Commemoration of the Persons Case on March 8.

My presentation will, of course, build on the report recommendations made by the task force I was a member of. Since the time of the report, I have continued developing my expertise in Quebec, in such areas as labour and management, as well as internationally, through the International Labour Office, on whose behalf I conducted numerous research activities and participated in pay equity missions to a variety of member countries.

The most important recommendation in the task force's report is obviously the first one, which reads as follows:

The Task Force recommends that Parliament enact new stand-alone, proactive pay equity legislation in order that Canada can more effectively meet its international obligations and domestic commitments, and that such legislation be characterized as human rights legislation.

In order to understand that recommendation, it's necessary to consider the current system, in which, pay equity is simply governed by the Canadian Human Rights Act. The pay equity provision in the act comes into play only when an individual files a complaint with the Canadian Human Rights Commission, in which case, the commission investigates the complaint and makes a decision. Either of the parties can challenge the decision. So recourse through the commission marks the beginning of a very slow, very lengthy, and very expensive judicial process that can go all the way to the Supreme Court. Clearly, that can take many, many years. And when I say the process is very lengthy, I mean it. We have seen cases that took 14 or 15 years before they made their way to the top court and it was decided that wage discrimination did indeed occur and that the complainants were entitled to equal pay.

In Public Service Alliance of Canada v. Treasury Board, it took so long for the matter to be resolved that a number of beneficiaries had died by the time the final decision was rendered. So they didn't see a cent of that money, not to mention that the decision ended up being very expensive for Treasury Board given all the interest that had accumulated over some 15 years.

What's more, unionized workers are really the only ones who can file a complaint. Although the legislation doesn't prohibit other workers from doing so, it's really only possible with the backing of a union. Non-unionized workers, then, in banking and other sectors don't really benefit from this complaint mechanism or lack the ability to file a complaint and see it through to the end of the process. At the current rate, it's estimated that it would take several decades to close wage gaps using this method. As you can see, it's not a very effective approach, and that's why the task force's recommendation references the need to be more effective.

Non-discrimination in the workplace is a basic right, as the first recommendation stipulates. It can't simply be dealt with by way of a few provisions in the Canada Labour Code—it is a fundamental and non-negotiable right. It is unacceptable that, today, in Canada, women working full time year-round earn just 87.8% of what their male counterparts do. Fifteen years ago, in 2001, women were earning 82.2% of what men were, so you can see we haven't made much progress in 15 years. In 2014, Canada had the seventh largest wage gap of all 34 OECD countries. In short, Canada is lagging way behind.

In a 2015 human rights report, the UN criticized Canada for persistent cases of gender inequality. That included a large wage gap and its disproportionate impact on women earning low wages, women from visible minority groups, and aboriginal women. It's a serious problem that has been going on for a very long time; it's a far-reaching issue that is hurting Canada's gender equality track record in the international arena.

It's important to note that progress is especially poor given that more and more women have university degrees. You would think it would have a positive effect, but when the salaries of female and male university graduates were compared, the data showed that, in 2008—the most recent year I have figures for—women earned $62,800 a year, while men earned $91,800. Having a university degree, then, does not guarantee women equal pay.

Proactive legislation, unlike the current system, would eliminate the need for legal recourse in order to receive equal pay because it would require every employer to determine whether unjustified wage differences were putting female workers at a disadvantage.

Understanding why wage discrimination exists is important. Wage discrimination stems largely from biases around women's work. First, it is assumed that women do not need full pay because they are simply a second income source for the family, which is not the case today. Second, it is thought that the skills necessary to perform certain jobs held by women, such as elementary school teaching, sales clerk, and nursing positions, are uniquely female skills inherent to women—a huge bias, I would point out—and that, as a result, employers don't need to compensate them properly because women are just doing what comes naturally.

A third stereotype that contributes to wage discrimination is that women hold positions that are free of responsibility, difficulty, and danger. These biases and stereotypes have a tremendous influence on the methods employers use to assess jobs. Consequently, the value attributed to the work women do ends up being lower than the value attributed to the work done by men, even when their positions involve the same level of responsibility, education, danger, and so forth.

Once the value attributed to a job is lower, it affects wages, and that is ultimately the reason for discriminatory wage gaps. That's what we need to work on, and proactive legislation is precisely the way to make sure things change.

Is everything okay? Can you hear me?

[The Chair, Liberal, Anita Vandenbeld]

Yes. You may continue.

[Prof. Marie-Thérèse Chicha]

Proactive legislation would allow for a systematic assessment method, when it comes to wage discrimination, through a number of steps.

Some worry that addressing gender pay inequity through proactive legislation goes against market principles, meaning that compensation would be the result of administration rather than supply and demand. Proactive legislation does, however, include exceptions. It's important to understand that. Proactive legislation on pay equity does not run counter to market forces. Exceptions are made. For example, if a business is found to have a wage gap in certain job classes where a labour shortage exists, such as in engineering or computer science, that difference will not be considered discrimination. The employer will still be able to pay engineers or computer scientists a higher wage without the practice being seen as a violation of the law. That's a really important element to keep in mind. So a proactive model does not conflict with market forces.

[The Chair, Liberal, Anita Vandenbeld]

You have 20 seconds to finish your presentation. Could you kindly wrap it up?

[Prof. Marie-Thérèse Chicha]

Fine.

I will simply conclude by saying that practical studies have shown that proactive laws on pay equity have many advantages not only for employees, but also for employers, because they improve their remuneration system. Most of the employers I met, even if they sometimes found the process demanding, were very satisfied. In the final analysis, this allowed them to manage their human resources and remuneration systems better.

I will conclude on that, but if you wish, I could send you a detailed brief explaining the various points I set out today.

Thank you very much for your attention.

[The Chair, Liberal, Anita Vandenbeld]

Thank you very much.

Yes, if you have more information you can send us in writing, that would be useful.

Thank you, Professor Bilson, for being here today. You have 10 minutes.

[Prof. Beth Bilson, Former Chair, Pay Equity Task Force and, Interim Dean and Professor of Law, University of Saskatchewan, As an Individual]

Good afternoon and thank you for inviting me to appear.

I wasn't sure what would be most useful to you. I thought I would talk briefly about the background of the task force I was a member of, which reported in 2004, then talk a bit about the recommendations our task force made in our report, and then talk a bit about what the situation since then has been.

In late 1999, the then minister of justice, Anne McLellan, and the labour program announced there would be a review of section 11 of the Canadian Human Rights Act, which is the pay equity provision.

If you look at section 11, you will find it is typical of a lot of the human rights legislation that was passed in the mid-1970s. That was a time when many of the provincial human rights codes were adopted as well as the Canadian Human Rights Act. In that generation of legislation, there was an assumption that if you stated fairly open-ended human rights principles in legislation, then people would figure out how to comply with those requirements, that they would perceive there was discrimination taking place, and they would take steps to correct that.

In the years after that, the years between the mid-1970s and the late 1990s, there was certainly a huge amount of jurisprudence about discrimination once the charter was in place. There was, I think you would have to say, progress made in terms of public awareness of discrimination and a lot of high-profile cases.

One of the discoveries was that a lot of discrimination and a lot of the roots of discrimination are much more subtle, much more systemic than people recognized in the mid-1970s when they were passing the legislation.

The basic format of human rights legislation was a complaint system. If you perceived you were being discriminated against, you would go to a human rights commission and make a complaint about that discrimination. There would be a variety of responses. There might be an educational response. There might be a mediation response. There might be an adjudication response. It was basically a system that depended on an individual, or in some cases an organization, making a complaint to a human rights commission.

That system proved particularly unsuited for pay equity complaints. There are a number of reasons, but part of it is this. The basic proposition underlying pay equity is pretty simple: if an employer has decided the value of some component of work which is performed by men is x, then that should be the value for the same component of work when it's performed by women. That is a fairly straightforward proposition. Unfortunately, it turns out that in order to assess whether the components are being treated equally, and in order to correct any inequity in the pay system, there really are many very technical things that have to be done.

As my colleague, Marie-Thérèse, pointed out, for individuals to take on a pay equity complaint really turned out to be unrealistic. Individuals really did not have the equipment to raise a pay equity complaint.

The announcement that was made in 1999 has to be seen in the context of a number of high-profile cases of very lengthy, very complicated, very expensive, and very unsatisfactory litigations in which a number of public federally regulated employers had been involved.

This litigation had gone on in some cases for 13, 15, or, in one case, 20 years. Some of that time was spent on a lot of procedural arguments in front of the courts about exactly how the system was supposed to work, but much of it was taken up in hearings before the Canadian Human Rights Tribunal, some of which were more than 300 days long, over a period of a decade during which there was much evidence from experts about different methodologies for assessing the pay systems.

There is not much common ground at all times between employers and their employee representatives, but really everyone agreed that this could not go on. That is, everyone thought that the complaint-based system under the Canadian Human Rights Act was not working well.

The task force was thus set up. We began work in 2000. We did a lot of public consultation; we had round tables with employees and groups of employers and groups of employees and employee representative organizations; we commissioned research; we had our own research staff. We looked into the whole pay equity situation pretty thoroughly and came up with a fairly lengthy report.

To give you just the basic recommendations that we made, the main one, as has already been suggested, was that the system should change from a complaint basis to a proactive basis; that is, that it be incumbent on each employer to examine its own pay practices, identify possible discrimination, and decide on a plan to rectify it, and furthermore to maintain the plan over time so that inequities would not reoccur.

Another important aspect of the system that we recommended is that there should be a high degree of employee involvement. A good analogy here is with health and safety legislation and the way it manifests itself in the workplace. There are health and safety committees that have representatives of employees and representatives of employers, and they deal with health and safety issues away from the usual labour relations system.

That's not to say that unions have not been critical to any advances made on the pay equity front, because they certainly have been, but our conclusion was that it would be a good idea if this area were divorced from the regular collective bargaining system.

Another of our proposals was that there should be specialized stand-alone oversight agencies under pay equity legislation. The Canadian Human Rights Tribunal had clearly made huge efforts to hear and determine the complaints that had been brought before them, but they dealt with all kinds of discriminatory practices and allegations of discrimination and were not experts at pay equity. Pay equity, as I said earlier, really has some technical aspects that require that people have training, that they have an understanding of the issues, that they have an understanding of the techniques for comparison of jobs, and that they be able to assess a pay system in some detail. We recommended a series of oversight agencies, a kind of parallel structure to many human rights commissions; that is, agencies providing for both an educational aspect and an adjudicative aspect, but specialized and limited to dealing with pay equity.

[The Chair, Liberal, Anita Vandenbeld]

You have about 20 seconds left.

[Prof. Beth Bilson]

Another thing that I think was really significant—and this is something that the last government departed from when it passed the Public Sector Equitable Compensation Act—is that we recommended that this legislation apply to the whole federally regulated sector; that is, public, private, large, small, unionized, and non-unionized players. All of those players should be covered by the legislation.

[The Chair, Liberal, Anita Vandenbeld]

Thank you very much. I'm so sorry you're out of time.

We have limited time for questions. We have under 20 minutes for questions. I'm sorry we have votes that are cutting our meeting short today.

If you have more that you'd like to submit in written form, we would be more than happy to distribute that to the committee members through the clerk.

I'll start right away with Ms. Dzerowicz.

You have seven minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, Madam Chair.

I would like to begin by thanking Professor Chicha for her excellent presentation.

I would also like to thank you, Beth Bilson, for your excellent presentation.

I have two questions for both of you.

The first one is to you, Professor Chicha.

You've done some work internationally, and I wouldn't mind hearing from you. Who does pay equity legislation well, if you had to pick one country? If you could also let us know whether that particular legislation applies to both the public and the private sector. Lastly has any of your work in Canada brought out how much it would cost if we enacted pay equity legislation here in Canada?

To you, Ms. Bilson, we're now in 2016. Since 2004 I believe there have been three other federal-level reports and two other provincial reports. We have had a lot of work by amazing organizations done in parallel. Catalyst Canada has done some parallel work that's reached some of the same conclusions you have, in that there are a lot of systemic issues. If you could propose legislation today, what would be the main elements you think we should consider? I would also ask you if you looked at what the cost would be overall of enacting legislation.

One other point I should have mentioned at the very beginning was that I agree it's finally time for us to be addressing this issue. I also agree that it's horrible Canada has the seventh worst record, and it's unacceptable to me for women to be earning 87 cents to one dollar of what a man is earning today.

[Prof. Marie-Thérèse Chicha]

Concerning the cost of pay equity, the studies that have been done up till now in Ontario and Quebec show that the cost of this for private sector employers does not exceed 1.5% of payroll, which is entirely reasonable.

Now, regarding other countries, I would say that those that are closest to having proactive legislation are Sweden, which has quite a broad approach, as well as Switzerland, at the federal level. Switzerland has programs in effect at the confederation level, and businesses that receive federal contracts must practice pay equity. In that country, this involves businesses that receive federal contracts.

Last December I was in Berlin for a conference that brought together people from Germany, the United Kingdom and Sweden. Germany is considering a law that would be inspired from the proactive laws in Quebec. In the United Kingdom as well, there are studies being done to introduce similar legislation. Discussions are being held on this. Sweden is in the process of improving its pay equity legislation.

I don't know if that answers your question.

[Julie Dzerowicz, Liberal, Davenport, ON]

Yes. Thank you.

[The Chair, Liberal, Anita Vandenbeld]

Professor Bilson, for the other part of the question.

[Prof. Beth Bilson]

With respect to what has happened in the years since our report, I would say that I've been involved with women's issues long enough that I am slightly distressed but not surprised that things have not moved very fast. I would say the situation that was reflected in our report is still basically in place across the country. I think that's been confirmed by a lot of the research that has been done since.

Going back to our reports, I actually think that we could stand by our recommendations. There have certainly been some changes in the environment, but I think the basic model that we proposed, which was proactive legislation that would put the onus on employers to come up with a plan and to maintain a plan, is what really offers the most hope for making progress in shrinking the wage gap, which really is very stubborn. The wage gap seems to be very resistant to change.

I would agree with Marie-Thérèse that although employers are concerned about the cost, the experience in Ontario and Quebec, under proactive legislation, was that the cost was not that significant and not as much as employers feared. Certainly, I think there are things about the complaint system. For one thing, the incidence of employers depends on whether somebody makes a complaint or not and then that particular employer is ordered to make a change while that employer's competitors may not have to. There are things about the relationship of the complaint system with the market that are not very justifiable either.

[The Chair, Liberal, Anita Vandenbeld]

You're out of time.

We will go to Ms. Gladu.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you for coming. I certainly hope you can come back because you're both very informed.

Is there any information about where the gap in pay equity is larger? Is it in the public sector or private sector? Is it in areas where people do the same job or in areas where people do equal work for equal value?

[Prof. Beth Bilson]

I'm not sure if I exactly understand your question, but certainly our research has demonstrated that the wage gap tends to be greater in non-unionized places of employment, that it tends to be greater for part-time employees, and that it tends to be greater at the lower levels of jobs.

I think part of that has to do with—and we sensed it, although we really weren't in a position to do very much investigation—the fact that there are a lot of situations where you have double discrimination, if you like. Where you have racial factors or disabilities or aboriginal workers, that seems to compound the wage gap although, as I said, we weren't really able to investigate that.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Marie-Thérèse.

[Prof. Marie-Thérèse Chicha]

Yes, I agree entirely with my colleague Beth Bilson. That is where the biggest discrepancies lie, in the non-unionized sectors, as well as in very precarious, part-time, on-call jobs, and so on. That is also where one finds intersectionality with ethnic origins or immigrants and disabled persons and aboriginal persons. If there is a new law, it should really take those elements into account.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I want to thank the witnesses for their contributions today. I would hope that we would be able to invite them back.

I wanted to touch upon the term “equitable compensation”. I believe, Ms. Chicha, that you referenced the Public Sector Equitable Compensation Act. It uses the term “equitable compensation” instead of “pay equity”. I think that reflects the desire to see fair wage compensation for all work of equal value.

I know it's very symbolic, but do you feel equitable compensation is what we should be striving for? Again, that means remuneration for all work, including benefits.

[Prof. Marie-Thérèse Chicha]

In fact, it depends on what you refer to. The terms as such or the definitions are less important than what is contained in those definitions. The terms pay equity or equal pay are used. In Europe they use the term equal pay. They mean “equal pay for work of equal value, without discrimination”. The problem we see today, and the statistics I mentioned show this, is that there is discrimination against women. By eliminating discrimination against women, we would get closer to pay equity for all employees, since that discrimination would be eliminated.

However, the term “equitable compensation“ also refers to collective bargaining through which that equality can be attained. As stated in International Labour Organization convention no. 100, pay equity is a basic right. A basic right is not subject to negotiation. You cannot say that you are going to reduce salary discrimination by 2% and say that in change people will have a little more flexibility in their work hours. When we talk about a basic right, it has to be respected in its entirety. Pay discrimination has to be eliminated without having it negotiated for other benefits that are not related to basic rights. So, you need to see what is behind the terms being used in order to see what is going on...

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I appreciate that, and I want to get into collective bargaining, but at another time, when I have a full amount of time to be able to get into that subject.

Ms. Bilson, do you have any comments on the terminology?

[Prof. Beth Bilson]

No, I agree. I think that the term “equitable compensation” was used in the federal legislation, which was never proclaimed. I am not sure that it was intended to deviate sharply from the concept of pay equity. It is different terminology, but as Marie-Thérèse suggested, it depends on what you include in your definition.

The idea that you are looking at creating non-discriminatory pay practices is the essential element in both terms, if they are defined in that way.