Pay Equity Committee on May 2nd, 2016

[The Chair, Liberal, Anita Vandenbeld]

Thanks very much, Ms. Mandal.

Mr. Hynes now has the floor.

Go ahead, Mr. Hynes. You have seven minutes.

[Derrick Hynes, Executive Director, FETCO]

Thank you, Madam Chair.

Good evening, everyone. Joining me today is Elizabeth Cameron, who is vice-chair of FETCO but also the vice-president of labour relations at Nav Canada, a federally regulated firm. I'll provide opening comments, and we will be both be available for questions at the end of the presentation.

For those of you who don't know, FETCO stands for Federally Regulated Employers – Transportation and Communications. I recognize that's a mouthful.

FETCO member organizations are all federally regulated firms in the transportation and communications sectors. We have existed as an employers association for more than 30 years. We are generally large employers in the federal sector, encompassing more than 400,000 employees and representing well-known firms such as Air Canada, Bell Canada, CN, Canadian Pacific Railway, and Telus, to name a few.

FETCO is not one voice. We try to present positions on issues that accommodate the concerns of all our members, but this is not always possible. Therefore, please accept the comments today as a collection of thoughts from many of our member companies. In the short timelines presented to us to report back to you on your work, this is what we can offer.

Let us start by stating one clear fact: FETCO member organizations support the concept of pay equity—that is, equal pay for work of equal value. We firmly believe that closing the wage gap between men and women is important. This is the right thing to do, and it makes good business sense. FETCO members believe that while the current system for addressing pay equity complaints is not perfect, it is better than creating an entirely new system following the proactive model used in Ontario and Quebec.

When we polled FETCO members on the positive attributes of the current approach, we heard three clear messages.

First, the current complaints-based approach has raised awareness about pay equity. Employers have a sense of responsibility and commitment to comply with the Canadian Human Rights Act, which specifically includes protection against wage discrimination based on gender. Employer awareness continues to grow through better knowledge, understanding, and application of some of the more technical aspects of gender analysis and job evaluation. These issues are all moving in the right direction.

Second, it is important to note that the provisions of the act, which prohibit discrimination in general, also protect the members of those groups against wage discrimination. In other words, prohibition on wage discrimination is already covered under the act for the 11 protected groups, which include the employment equity designated groups, of which women are one such group, of course.

Third, the current approach has led to significant pay adjustments for women in the federal sector, in the hundreds of millions of dollars. While our members may not agree with all aspects of the settlements that have emerged, we have seen the needle move in a number of areas via a number of cases. There has been progress under the current model. These are complicated cases that have, at times, taken years to resolve, but they are resulting in change.

Now, here are a few challenges.

First, as you know, pay equity complaints tend to be protracted, confrontational, and costly. Pay equity is complex and resource-intensive to study and implement. Even larger and more sophisticated employers must engage expert consultants. The Canadian Human Rights Commission is under-resourced in this area and therefore is often unable to investigate and process complaints in a timely way.

Second, the current system can make collective bargaining relationships more complicated. Under the Canada Labour Code, parties enter into good-faith bargaining to find an agreement on many matters, including compensation. A practical challenge emerges when, at the end of bargaining, unions can use section 11 of the act to launch a pay equity complaint against an employer.

Third, some of our members raised issues with the exceptions listed under section 16 of the Equal Wages Guidelines. There is a concern that section 11 of the Canadian Human Rights Act assumes that nearly all pay variances must be attributed to gender discrimination. We suggest there may be other factors at play that contribute to wage gaps, and we would welcome an opportunity to research this further.

FETCO members are generally not convinced that a proactive model is the solution. This would be costly and administratively cumbersome for both government and business. This model has not proven ideal in the jurisdictions in which it has been introduced. As an aside to this, we’d like to better understand the pros and cons of the proactive approach. At this point there are more questions than there are answers.

This approach would create a commission and tribunal duplicating the Canadian Human Rights Commission and the Canadian Human Rights Tribunal, which already have the structures and processes in place to handle such complaints, and with which all the parties are already familiar. We are not sure of the value in creating a whole new set of government entities when adequate infrastructure already exists.

We suggest that governments should commit to enhancing the role of the Canadian Human Rights Commission and improving the processes by which pay equity complaints are administered, including injecting additional resources.

As employers, we would like to be part of the solution. We believe consultation and study should continue to be pursued. Also, we are big advocates of this work being done under the tripartite model, whereby government, business, and labour collaborate on finding solutions.

We believe the best way to tackle the issue of pay equity is to take a comprehensive approach that addresses the root causes of wage disparity between men and women. Raising awareness among employees about the issue and processes available, both internal and external, should also be considered.

We do not believe this is an issue that can be solved overnight via one solution. In addition to addressing discrete challenges with the current complaints-based approach, we suggest other areas in which the parties can collaborate. For example, we could study the root causes of the wage gap; support labour market research that forecasts demand for skills, allowing educational institutions and organizations to proactively plan for roles and income within industries; sponsor activities to attract women to non-traditional fields where they are currently under-represented, such as science, technology, engineering, and math—the STEM sectors—via apprenticeship programs or other educational resources; provide educational opportunities for employers to ensure that any gender stereotypes and biases are removed from all human resource activities; support initiatives to promote women in leadership roles to ensure effective paths exist for women to advance within organizations across the public and private sectors; and finally, reward organizations that increase their diversity.

This is what we believe a system of the future looks like: three parties coming to the table, solving problems and jointly improving the current approach via comprehensive analysis.

Thank you.

[The Chair, Liberal, Anita Vandenbeld]

Thank you very much, Mr. Hynes. You were right on time.

We now have Ms. Ludgate, who is joining us via video conference from Saskatoon.

Ms. Ludgate, you have seven minutes.

[Catherine Ludgate, Manager, Community Investment, Vancity Credit Union]

Thank you.

Good evening. Thank you for inviting me to speak with you. I'm Catherine Ludgate. I'm a manager in the community investment team at Vancity Credit Union, based in Vancouver. I'm actually in Saskatoon at a conference of all credit unions.

I'm Vancity's lead on our adoption of the living wage and its advocate to other employers to adopt the living wage. This committee knows the statistics about pay inequality in Canada and has heard and will hear from many more experts offering analysis and tools.

I'm here to talk about one of the tools that employers can use to address pay equity and the poverty that results from low-waged work. As The Globe and Mail recently reported:

Women are lagging at both the bottom and the top of the pay scale. At the lower end, women are more likely to earn minimum wage, work part time and live on low income, particularly if they are aboriginal or a visible minority. Erratic scheduling and insecure work makes life more difficult, especially for single mothers.

That was from just a couple of months ago from The Globe and Mail.

Many discussions about pay equity focus on the glass ceiling and the inequity of pay in middle-income management and leadership roles. Of course this must be addressed, but let us not forget about those workers who work full time, year round, in minimum-wage jobs, many of which are gendered roles, such as hospital workers, service workers, retail sales agents, clerical agents, and janitors.

This group of critical services is populated in large measure by women. In the absence of adequate minimum wages and important social programs such as universal and accessible child care, the voluntary adoption of the living wage is one tool that employers themselves can use to improve working conditions for women at the bottom of the pay spectrum in Canada.

It is a proactive model. It's within the reach of most employers. It is being adopted by credit unions across the country. It simply and directly addresses the low wages that are paid to some of the most vulnerable workers, some of the most vulnerable women in our communities.

I'd like to focus on the connection between low-wage work and inequality and poverty for the remainder of my remarks.

Canada, a country of very rich resources of all kinds—natural and environmental, social capital and community, educational and technological—is a country with a poverty crisis. By its own reporting, Statistics Canada notes that one in seven Canadians lives in poverty, meaning almost five million people. In a 25-year period, from 1980 to 2005, average earnings for the lowest-paid Canadians fell by 20%. In my home province of British Columbia, one in five citizens now lives in poverty, and a majority of those are working full time, full year.

What is to be done? We need federal and provincial poverty reduction strategies and we desperately need a federal housing strategy and a universal child care strategy, but concurrent with citizen advocacy to press for better public policy, employers ourselves can play a role in poverty and inequity in our communities. One of the best tools available to employers is the adoption of the living wage.

The living wage is a calculation of what it costs for a family of four—two income-earners and two small children—to address the cost of child care and to make basic ends meet. In metro Vancouver, that wage is now calculated at $20.64 per hour. That wage is composed of base pay offered by an employer and the value of non-mandatory payroll benefits, such as extended medical coverage or a transportation allowance.

The wage is updated each year based on a transparent methodology developed by the Canadian Centre for Policy Alternatives, and it calculates inputs such as housing, transportation, child care, food, household supplies, an education for parents, and some costs for social participation, such as enrolling children in limited after-school activities.

The living wage is not a luxurious wage. It doesn't include paying off any existing debt or saving for retirement or saving for one's children's education. It simply covers the costs of getting by at one full-time job per adult worker.

In B.C., we calculate that the living wage includes almost $4 an hour to cover the very high cost of child care and $1 an hour to cover the co-pay aspect of our provincial medical insurance program. With better public policy and programs around accessible child care and medical premiums, the living wage would be reduced to closer to $15.00 an hour, in line with various calls for an increased minimum wage across the country.

In the absence of those public programs, the voluntary payment of the living wage is how employers can address poverty and pay inequity in our communities.

My credit union became a living wage employer in 2011 and is proud to have recertified the new living wage rate each year. We actively encourage other employers, and in particular credit unions, to join us as living wage employers as a best practice for employers. By the end of 2015, seven credit unions across Canada had become living wage employers, and now we are eight.

We learned a lot as we became a living wage employer. We learned that where we had subcontracted out for labour supports—for janitorial, security, temporary agencies, and offsite catering—those workers who served us were making minimum wage, and those jobs were largely gender-based.

The janitorial staff were working at two or three jobs. They were at another workplace during the day and then cleaning our buildings at night. As we moved to paying a living wage through those subcontracts, those janitorial staff no longer had to work at multiple low-wage jobs. Janitorial staff can now work at one fair-paying job, and those moms now have time to participate in the lives of their families, to read to their children, to play with their kids. The security staff can now make food choices they hadn’t made before and can look after aging parents.

For our own staff, pride in who we are as an employer increased. Universally for living wage employers, the experience is that the cost of attraction, recruitment, and retention goes down significantly. Productivity goes up. Morale improves. In fact, morale improves for everyone as employers create more just, equitable, and inclusive workplaces.

Thank you, Madam Chair and members of the committee, for inviting me to speak today about the living wage. The voluntary payment of the living wage by employers is both the right thing to do and a best practice in addressing pay inequity for low-income earners.

[The Chair, Liberal, Anita Vandenbeld]

Thank you very much.

Thank you to all the witnesses.

We will start our questioning now. We'll start with a first round. It's seven minutes to Ms. Sidhu.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you, Madam Chair.

Thank you, panels, for being with us.

I will share my time with Matt.

My first question is to the Canadian Bankers Association.

Many of your members are large corporations with considerable resources. Some of your members, such as trucking companies, are smaller organizations. Some countries with a pay equity system allow small companies more time to establish pay equity plans, allow less detailed reporting, and provide a longer timeline to correct pay inequities.

What will be the effect on your members being required to implement and report on maintaining pay equity plans?

Second, if implementing these changes will be a challenge for some members, what, if anything, should be done to support such companies?

[Marina Mandal]

Just to clarify, was the question for the Canadian Bankers Association or FETCO?

[Sonia Sidhu, Liberal, Brampton South, ON]

Either one can answer.

[Marina Mandal]

I'm happy to start.

Thank you for the question.

I think you're absolutely right; we haven't formulated detailed views on that. One of the principles I mentioned in my opening remarks was flexibility in terms of the types of operations and the size of the workforce. When people think of Canadian banks, they think of the big five with the biggest stakes, but we do have small bank members. Small bank members have subsidiaries that are not always run in the same way as the parent banks. I think looking at that type of flexibility is really valuable, as well as looking at models in other jurisdictions that adopt flexibility.

[Sonia Sidhu, Liberal, Brampton South, ON]

My other question is, what is the current gender composition of your member companies? Has it changed over the past decades?

[Marina Mandal]

I actually just looked at the numbers. The short answer is yes.

The numbers I have in front of me are actually for senior manager, middle-management, and professional roles.

For the senior manager, it went up approximately 14% from 2004 to 2014. For the representation of women in middle management, it went up, I believe, 6%. Then there was a drop-off in the professionals category, which we suspect is probably because of the migration of professionals up into management roles. If that is data the committee wants, we can definitely look into it. I just don't have it collected in front of me.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you.

[The Chair, Liberal, Anita Vandenbeld]

Mr. Hynes.

[Derrick Hynes]

We also don't have that data at our fingertips right now. If it is information that would be of interest to the committee, we could certainly reach out to our members and ask them for that sort of information.

[The Chair, Liberal, Anita Vandenbeld]

Okay.

If you do send further information, please send it to the clerk, and if possible by the end of the week, because we will be starting our deliberations on our report.

Mr. DeCourcey, you have four minutes.

[Matt DeCourcey, Liberal, Fredericton, NB]

Briefly, before I flip it to Ms. Dhillon, I noted some comments that were made.

I think, Mr. Hynes, you mentioned that you weren't sure about the effect of proactive legislation in Ontario and Quebec in reducing the wage gap. We just had a presentation that demonstrated a variety of different measures that do help reduce the wage gap. I think we also saw some evidence that proactive legislation has helped as well in those big provinces.

Do you have conflicting evidence or information that might suggest otherwise? Are there other contacts that lead you to question whether proactive legislation does have the desired effect of reducing the wage gap?

[Derrick Hynes]

Yes, there are two things.

First, when we did our research in preparing for this presentation and in consulting with our member companies, we could find little evidence that suggested great success for the proactive model in reducing the wage gap.

Second, the StatsCan presentation comparing Ontario with the rest of Canada placed Ontario under the proactive model and Canada itself outside that model. The wage differentials in terms of the changes are almost identical. This leads me to wonder whether there are other factors in play. Would throwing out the current system and bringing in a proactive approach be the right thing to do without high-quality data to justify it?

[Matt DeCourcey, Liberal, Fredericton, NB]

I will pass the time I have left to Ms. Dhillon.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Ms. Mandal, on page 3 you say:

Third, a new pay equity regime should be built on existing precedents and structures. It is appropriate that protection of the human right to freedom from gender discrimination should remain with the Canadian Human Rights Commission.

Can you please elaborate on that?

[Marina Mandal]

If I understand the question correctly, we put that position forward because it's a human right.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Looking at the existing precedents and structures, which would you use?

[Marina Mandal]

In putting that comment together, we were thinking of some of the recommendations in the 2004 pay equity task force report. The suggestion by the task force was to create a new piece of legislation, a new pay equity commission, a new tribunal. This throws out a lot of the processes and precedents.

There's also a pay equity office under the labour program, and there's authority in the Canada Labour Code for inspectors in the labour program to look into the workplace and assess pay equity.

Those are two legislative avenues having to do with infrastructure and how familiar banks and other employers are with the processes already in place. It's not clear that we need a whole new apparatus—legislative or infrastructural—to achieve our goal. It's a human right and it is enshrined in the act.

[The Chair, Liberal, Anita Vandenbeld]

Ms. Gladu.

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

Welcome to all of our panel members.

Ms. Mandal, you were saying that within the banking industry you've achieved 50.5% of women at the lowest ranks, 50.4% in the middle ranks, and about 34.5% in the senior ranks. This sounds like gender parity for the middle and the bottom as well as a pretty good improvement in senior management. You've done it nationally, and this interests me because we were thinking about legislation in various areas. Not all provinces are legislated, yet you've been able to achieve it.

I'm wondering if you could comment on the elements that you think helped you to close the gap in the absence of legislation.

[Marina Mandal]

The numbers I quoted are reported under the employment equity data collection requirements: 34.5% for senior management, and then gender parity with middle managers and professionals.

Section 11 of the Human Rights Act prohibits discrimination on the basis of gender. When the Equal Wages Guidelines came out—and that is national legislation—banks put a lot of effort into pay equity programs to ensure that they were compliant with the law.

Other witnesses, including StatsCan, talked about unexplained factors, other socio-cultural or sociological factors. I can't speak to that. I can say that from our industry's perspective part of the pay gap for all Canadian companies is that there are not enough women in senior roles.

There's been a lot of effort made. I have lists of the kinds of programs that banks have in place to attract and recruit women. There are targeted recruitments at universities as well as mentorship programs for women in the STEM sectors. Then there's the leadership pipe or pipelining at the banks, which identifies women who are seen to have career trajectories that would pull them into senior roles. There is a lot of fostering of women's advancement, because of the obvious correlation between a senior role in an organization and a higher wage.