Pay Equity Committee on April 11th, 2016

[The Chair, Liberal, Anita Vandenbeld]

I would like to call the meeting to order. We have quite a few witnesses today so I want to make sure we're starting as early as possible.

Today we have officials from Status of Women Canada, the Treasury Board Secretariat, and the Department of Employment and Social Development. Each one will be given 10 minutes and then we will go through the rotation of questions.

Do the witnesses have a preference in which order they wish to speak, or should I just go in the order listed here?

[Justine Akman, Director General, Policy and External Relations, Policy and External Relations Directorate, Status of Women Canada]

I believe Status of Women will start and then Treasury Board and then labour.

[The Chair, Liberal, Anita Vandenbeld]

In that case without any further ado I would like to call on Justine Akman who is the director general of policy and external relations of the policy and external relations directorate for Status of Women Canada. You have 10 minutes.

[Justine Akman]

Thank you.

Good afternoon, committee members. We just want to give you a very high-level overview of the wage gap, which is significantly different from pay equity, but it gives you a sense of the broader context.

On slide 2 we give some definitions of what the gender wage gap is, which is the ratio of aggregate female to male wages, and it's used generally to measure income disparity between men and women. It is measured in a variety of different ways. It can look at full-time or full-year wages. It can also be measured in terms of job tenure, or on the basis of hourly wages. This is different from pay equity, which I don't have to tell this committee is defined generally as equal pay for work of equal value.

On slide 3 we give some of the estimates—although there are many—of Canada's wage gap. In 2011 it was about 30%, and within the federal public sector the wage gap is roughly 11%. If you measure full-time job tenure only, women earn roughly 20% less than men who are working full time. In the past, the wage gap closed rather quickly and seamlessly because more women were entering the labour market, but now there are so many women in the labour market the closing of the wage gap has actually slowed.

On slide 4 we provide some international rankings, and there you can see that Canada ranks 28th out of 34 OECD countries for the wage gap between male and female full-time full-year workers, and at about 20%, Canada falls below the OECD average of 15.6%. According to the World Economic Forum, Canada dropped 10 positions to 30th out of 145 countries, and is 80th out of 145 countries if you measure gender income inequality only.

Slide 5 talks about those groups who are most affected by the wage gap. Minority and indigenous women are affected according to their family status, with single mothers most likely to live in poverty, and mothers generally less likely to raise to senior positions. Age affects the wage gap with a smaller wage gap for younger women. Then, of course, there's regional differences as well that affect the wage gap.

On the next slide there's a list of factors contributing to the wage gap, and they're listed here. Pay equity is only one of them, so this presentation will focus on the other factors that are listed.

On slide 7 we talk about part-time work. Women have consistently made up about 70% of part-time workers since statistics became available in 1997. This is true in all age groups. Almost 40% of women working part time indicate they are doing so involuntarily. If they had other options, they may actually be working full time. Part-time work tends to provide less stability, including a lack of pension, vacation, and sick benefits.

Slide 8 shows labour market segmentation is another factor affecting the wage gap. The Canadian labour market does continue to be highly gendered with two-thirds of occupations being gender concentrated. There are more women in the service sectors, whereas men are overrepresented in goods-producing sectors. Many recent shortage occupations have been in male-dominated industries, such as engineering or trades, where women make less than men. Employment growth has been higher in STEM occupations, except I suppose slowing recently, but particularly for men. Women's representation in mathematics and computer science is at 36%, and architecture and engineering is at 30% for master's programs. Women are studying the sciences more than they used to, but they don't tend to then go on to work in the sciences as much.

The next slide talks about women's under-representation in management. They are gaining an increasing share of management positions. However, they are struggling to rise above middle management, and they accounted for 36% of management-level workers in 2014. At the senior management level they accounted for 32% where they were making less generally. The United Nations says that 30% is the tipping point for any kind of representation. We're sort of there in management and could be doing better.

Bias and discrimination is on slide 10. This is obviously a tough one to measure. There's an assumption that it does still feed into the wage gap, and 10% to 15% of the wage gap can by estimate be attributed to employer bias or discrimination. Pay equity regimes have, of course, been implemented across the country to address employer discrimination related to remuneration. A 2012 study found that all of Canada's designated employment equity groups face stereotypes and bias in employment. A Conference Board of Canada study found that millennial women are less likely to be identified as high potential than their male peers. The slide just continues to talk about the issue of bias and discrimination, and it can occur in relation to remuneration, hiring, job assignment, termination, promotion, compensation, and working conditions, all of which can feed into the wage gap.

Slide 11 talks about unpaid work. Women are still doing more of the care at home and doing more domestic work than their male counterparts. In 2010, the average total time women spent caring for children under five was 6.5 hours per day, while men spent just over three hours.

I won't go into all of the different details on this slide, but women are also taking care of more seniors, parents, or other kinds of dependants, and providing more intense care. Clearly, that also feeds into the wage gap.

The role of Status of Women, in addressing this, is that the minister has been mandated to work with departments to make meaningful progress in reducing the wage gap between women and men. We support other departments to integrate gender considerations into their policy and program initiatives, and to help think of promising areas where we could actually have some influence on the wage gap.

This is about ensuring that the right legislative tools and mechanisms are in place; strengthening labour market participation of women, for example, through child care supports; and enhancing women's participation in areas where they're under-represented to get at the labour market segmentation piece.

We're also working very closely with our colleagues in the provinces and territories to study the issue of the wage gap. At our upcoming meeting in June, we'll actually be rolling up our sleeves and digging into that issue by presenting some papers and research on the issue to the ministers.

With that, I close my presentation and pass it on to my colleagues.

[The Chair, Liberal, Anita Vandenbeld]

Thank you very much.

We have two representatives from Treasury Board Secretariat. We have Renée Caron, senior director, equitable compensation, compensation and labour relations, office of the chief human resources officer; and Manon Brassard, assistant deputy minister, compensation and labour relations, office of the chief human resources officer.

Ms. Brassard, you have 10 minutes.

[Manon Brassard, Assistant Deputy Minister, Compensation and Labour Relations, Office of the Chief Human Resources Officer, Treasury Board Secretariat]

Thank you, Madam Chairperson, for the opportunity to appear today to talk about pay equity in the federal public service.

I intend to provide you with information on pay equity, and take you through some of the key differences among three models: the CHRA, the Canadian Human Rights Act; the Bilson report recommendations, or some of them; and the Public Sector Equitable Compensation Act.

The goal of pay equity is to redress systemic undervaluation of women's work compared to men's work within an employer's organization. This requires that a comparison be undertaken between the work done predominantly by women with that done predominantly by men. The value of work must be measured with a view to putting equal-value female and male work side by side. If they're paid equally, then there's no problem. However, if the pay is unequal, then there is a pay equity problem that has to be fixed.

It does sound simple; it isn't. It is a highly technical exercise. Employers and bargaining agents either need to agree or they go to an independent third party for resolution.

To put pay equity into practice, an employer's jobs have to be grouped. Often, the job groups or job classes simply follow the employer's occupational group structure. In the Government of Canada, our current occupational group structure would produce 73 groupings for pay equity purposes, at least.

Even though this sounds pretty simple, in practice there is disagreement because the groupings can follow smaller subsets of an employer's occupational structure. A good example of what could be a group structure is the clerical and regulatory group, CRs. They include employees who do data entry, mailroom, records office work. It's one of the largest predominant occupational groups, with 25,000 employees more or less, and the group is almost 80% female.

Experts play a role in pay equity and the measurement of value of work is one of the most important areas where experts need to be relied upon. Experts, often an expert for the employer and one for the bargaining agent side, will advise on the input, the jobs to be evaluated, the tool to measure SERWC—skills, effort, responsibilities, and working conditions—and then the application of the tool. Sometimes the experts come out with the same or similar results; sometimes they don't. Then it's up to the parties or an independent third party to resolve the areas where there are differences of opinion.

The next four slides give you a flavour of how a typical pay equity analysis does wage comparisons. This is where we get technical. I hope you have the slides. They were handed out.

[Julie Dzerowicz, Liberal, Davenport, ON]

I don't know which page you're referring to.

[Manon Brassard]

I'm on page 5 of the public Treasury Board deck.

[The Chair, Liberal, Anita Vandenbeld]

If you could specify the title of the deck....

[Manon Brassard]

It's called “Pay Equity: Key Concepts and Comparison of Models”, Treasury Board.

[Julie Dzerowicz, Liberal, Davenport, ON]

We don't have it.

[The Chair, Liberal, Anita Vandenbeld]

If you'd like to continue, we'll make sure that it gets handed out.

[Manon Brassard]

The first and simplest way to do the comparison is what we call job to job, which is on page 5. Without worrying too much about the graphic for the moment, the idea is that if you have a female job and a male job that are of equal value, then there can be a straight one-to-one comparison about how much they are paid. The graphic, if you have it in front of you, is helpful to show you the reality that the experts are analyzing lots of jobs, both female and male, and trying to figure out if they are equal value jobs and if there is a pay difference.

On page 5 it will show you that E has a clear comparator and it's L. Therefore, job to job, there's a female predominant job that has the same value. If you look at L, it's the same, and that would be the pay rate of this person. You take the first L if it's going with the lowest pay comparator, and if you're not, the comparator could go to L2.

Job to line is a widely used method. The essential idea in this case is to take all the comparators and then draw a line on the axis for value. Once you have that line of the male jobs, that's a regression line. Then you do a best fit, and the female jobs that are in the complainant group—those jobs you're looking at—are plotted. If any job falls below the male line, then an adjustment needs to be made. In the example on the graphic, job G would get an $11-per-hour adjustment.

If you look at the next slide it's the case of line to line. Here you draw a male line in the matter I just described. You do the same for the female jobs, and if the female line falls below the male line, then the adjustment is the amount necessary to bring the female line up to the male line so that the two lines will coincide. If a female job falls below the female line, then the adjustment it receives will still leave it below the male line. That's the difference between this method and the job-to-job method.

Then there's the job to segment. It's like the job to line except that instead of drawing a long male wage line, the evaluation axis is subdivided into smaller portions of two or more best-fit male lines. That allows for a more curvy line, and it takes into account the fact that the male jobs might follow more of a curve. It's probably a more accurate and precise representation of the male pay.

The last slide gives a summary of some of the key differences between the Canadian Human Rights Act, PSECA, and Bilson. The first distinction is the gender threshold. The CHRA is a sliding scale. For PSECA the threshold was 70%, and under Bilson it is 60%. The second major feature is to be aware of how the value of work comparison could be done, and the last one is the wage comparisons. The CHRA looks at line to line and job to line. PSECA was job to job, and with Bilson there could be two methodologies. That is the extent of my presentation, and I look forward to your questions.

[The Chair, Liberal, Anita Vandenbeld]

You do have a minute and a half left if your colleague wishes to speak; otherwise, we'll move on to the next speaker.

We also have two people from the Department of Employment and Social Development.

I understand Mr. Giles will be speaking.

[Anthony Giles, Assistant Deputy Minister, Policy, Dispute Resolution and International Affairs, Labour Program, Department of Employment and Social Development]

That's right.

[The Chair, Liberal, Anita Vandenbeld]

You have 10 minutes between you, so you can divide that as you wish.

Anthony Giles is the assistant deputy minister of policy, dispute resolution, and international affairs for the labour program, and Margaret Hill is here as the acting director general, strategic policy, analysis, and workplace information.

You have the floor, Mr. Giles, for 10 minutes.

[Anthony Giles]

Thank you very much.

Thank you very much for inviting me this afternoon.

I had the advantage of knowing what my colleagues were going to present, so I will not repeat anything that they've gone through. I thought I would use my time instead to focus on what the Minister of Employment, Workforce Development and Labour is responsible for in the pay equity file to help you understand a little more about what we call the “federal private sector” jurisdiction to which pay equity applies.

I'll start by talking about the federal private sector. Oh, I should have checked that everyone has—

[The Chair, Liberal, Anita Vandenbeld]

You might give us the title of the deck so that people will know which one it is.

[Anthony Giles]

The title of the deck is “Pay Equity—The Federal Private Sector”, and it's coloured in mauve and green.

As I was saying, I'll speak first about the federal private sector. I'll then speak briefly, toward the end of my presentation, about the various roles and activities played by the labour program of ESDC, and then very briefly some high-level points on what has happened in the private sector with respect to pay equity.

Slide number 3 makes one simple point, and it's an important reminder, I think, because here in the Ottawa region pay equity often gets debated in terms of the federal public service, which is the preoccupation of most of the people who live here. The Canadian Human Rights Act, and particularly the right to equal pay for work of equal value also applies in what's called the broader federal private sector.

I should say that the normal way we define the private sector might strike you as a little unusual. We include federal crown corporations, and that's for two reasons. First is that they tend to work more like businesses than a public service does. Second, for that reason, federal crown corporations are covered by the Canada Labour Code, which applies generally to the private sector, so corporations like Canada Post or VIA, for example. We understand that crown corporations aren't perfectly private, but that's for your consideration.

On page 4, you can see that the minister's mandate for the private sector includes some very distinct and different kinds of industries in Canada. First, telecommunications, so radio, television, broadcasting, cable companies are covered, so obvious examples for you—Telus, the CBC, Astral Media, Vidéotron in Quebec.

The federal jurisdiction also includes the banking sector, so all of the large banks and many of the smaller banks as well are covered by federal labour legislation and by pay equity in the federal jurisdiction.

I should say, just by way of parentheses, that of all the employees in the federal jurisdiction in Canada, about 30% work in the banking industry.

Then there's a category of smaller organizations, or at least smaller sectors. Federal legislation covers grain handling, uranium mining, pipelines, and postal services. As I said earlier, crown corporations are covered, and the two largest examples that come to mind are Canada Post and VIA Rail.

Federal jurisdiction also covers interprovincial and international transportation. That is probably one of our biggest sectors, next to banking. For that reason, I've broken it out into some of the subsectors to help you understand the differences.

First is air transportation, not just the airlines themselves but also NavCan, which runs the air traffic control system in the country, security services at airports, and so on. Rail transportation—any rail line in Canada that crosses a provincial border is covered by federal legislation. Maritime industries, so ports, ferries, shipping that goes between provinces, those are all covered as well. Finally, there is road transportation. This includes any trucking firm that trucks across a provincial border or an international border, and oddly enough, even some municipal transit systems. The two here in the Ottawa-Gatineau area, both of which cross the bridges, fall under federal jurisdiction simply because they span more than one province.

On page 6, I've tried to give you some sense of the relative size of the private sector versus the public service. You can see here that about 75% of federally regulated employees in general, who are covered by pay equity, actually fall in the private sector. About 26% are in the public service, which includes the RCMP.

On page 7 we've tried to give you a sense of some of the variety you find in the federal jurisdiction in Canada. You can see in this matrix that we've divided examples into medium and large firms—that is, those with 100 or more employers. There are about 500 of these in the federal jurisdiction, but they actually employ 90% of employees who fall under the federal jurisdiction. That relatively small number is actually of firms that are among the most important in the country.

Then there are smaller firms—about 10,000 of them—that fall under federal jurisdiction, but they account for only about 10% of total employees.

Within those two categories there are the highly unionized and the barely unionized, if you will. Some obvious examples are airlines, railways, and crown corporations, which tend to be very highly unionized. Among the bigger firms that are non-unionized, you find banking as well as a couple of examples that fall into other industrial categories, such as FedEx, Rogers Communications, and WestJet in the airline industry.

Among small firms, you find some industries that are fairly highly unionized—marine transportation, for example—and then you find a sector of very small firms that don't have very many unions at all. Trucking is a classic example.

The point we're making here is that as this committee studies the area of pay equity and thinks about how it could be applied. It's important to keep in mind the variety of different firms to which it will apply and to think in terms of their needs for some flexibility.

I'll just finish quickly, if I still have a minute.

I won't go into page 8 in detail. I'll just say that the labour program of ESDC plays three roles with respect to pay equity. First, we offer policy advice. For example, the Bilson report was a joint initiative of the Minister of Labour at the time and the Minister of Justice, along with the government response.

We play a fairly small legislative role, but I want to mention it. The Canada Labour Code gives labour inspectors the authority to refer any suspected cases of gender pay discrimination to the Canadian Human Rights Commission.

Then third, we play a modest program role, largely providing educational support tools by way of our website to employers and employees who are interested in the area of pay equity.

I'll finish with a couple of points on pay equity over the years in the federal jurisdiction and the federal private sector.

First, there is obviously still, as my colleagues have pointed out, a gender wage gap. It has reduced slightly over the last 10 years or so from 81.9 cents in 2005 to 86.9 cents in 2015. Most of you will be familiar with some of the large cases that have fallen into the federal private sector—Bell Canada, Canada Post, and Air Canada. What's of note is that those are all very large firms.

I'll finish there. Thank you.

[The Chair, Liberal, Anita Vandenbeld]

Thank you very much to all the witnesses for being informative, and also for being so succinct.

We'd like to go into the first round of questions, in which each member will have seven minutes.

We will start with Ms. Nassif.

[Eva Nassif, Liberal, Vimy, QC]

Thank you for being with us today to share with us your explication about pay equity.

The federal government and some of the provinces have pay equity legislation in place, while other provinces currently have none. The wage gap has declined slightly over the last decade in the federal public service, although a fairly significant gap remains. In the provinces that do not have legislation, the overall reach is varied.

My question is in two parts. Do you believe that legislation could ever adequately address the issue? Is it the only answer to address this issue? Is there any way we have been able to attribute the decline in the wage gap strictly or mostly to the existence and application of pay equity legislation currently in place?

The second part is, assuming we could implement further legislation that is national in scope, would forced compliance be realistically possible from the federal level across all provinces? Even more, with or without the help of the provinces, would it be possible to administer and enforce such legislation adequately across the private sector in Canada?

[Anthony Giles]

I'll try. Thank you for the question.

With respect to the first part of your question, I think most experts would probably agree that legislation alone, particularly legislation on pay equity, will not by itself entirely close the gender wage gap. As my colleague from Status of Women pointed out earlier, the gender wage gap is created by a whole series of factors, one of which is addressed by pay equity.

So it can make a contribution, but I would also go on to say that legislation can't fix some of the underlying problems that stem from the socialization of children into gender roles and perceptions. Legislation can't fix that. It can contribute to sensitizing people to the issues, and therefore, can play a positive role, but by itself it's not a single solution.

With respect to a nationwide program, I think it would be unconstitutional for the federal government to attempt to impose a pay equity regime in provincial jurisdictions. I do think there would be some scope, if the federal government had the appetite to do so, to discuss with its provincial and territorial partners opportunities to work together in this area, exchanging best practices and so on. But by itself it could not intrude into provincial jurisdiction and impose a pay equity program.

[Eva Nassif, Liberal, Vimy, QC]

I have another question.

There are reports that call for the removal of pay equity regulations from collective bargaining. It's often said that pay equity, which should be seen as a right, should not be something that has to be bargained for. Conversely, there are those who say that removing this bargaining ability would reduce the necessary scope of power and influence of unions in collective bargaining situations. Do you think removing it from collective bargaining could have potentially damaging consequences for our cause?

[Manon Brassard]

The PSECA has been criticized for introducing it into collective bargaining. The issue of pay equity in collective bargaining has its challenge from an implementation point of view. On the other hand, it provided a process by which, or a time by which, pay equity could be revisited. So it's a policy choice to do it. There are advantages and disadvantages of doing it.

[The Chair, Liberal, Anita Vandenbeld]

Did you have any additional questions or did you want to share your time? You have two and a half minutes.