Status of Women Committee on Oct. 28th, 2010

[The Vice-Chair, Conservative, Cathy McLeod]

I call the meeting to order.

Pursuant to the order of reference of Wednesday, May 5, 2010, we are considering Bill C-471, an act respecting the implementation of the recommendations of the pay equity task force and amending another act in consequence.

Today we have a number of witnesses. We have, from the Equal Pay Coalition of Ontario, Mary Cornish; from the Communications, Energy and Paperworkers Union of Canada, Gisèle Pageau; from the Federally Regulated Employers - Transportation and Communications, FETCO, John Farrell and Barb Gagné; from Opus Mundi Canada, Paul Durber, senior consultant; and from Statistics Canada, Marie Drolet and Sylvie Michaud.

You'll have five minutes for your presentations, and then we'll be going into questions and answers. I believe most of you have been here before, so you're familiar with our routine.

We will start with the Equal Pay Coalition of Ontario.

Thank you.

[Mary Cornish, Chair, Equal Pay Coalition of Ontario]

Thank you very much for inviting me.

I am also, in my capacity, a human rights expert. I want to focus in my short time on my presentation, which I think will be translated, as it is currently just in English.

Pay equity is an international standard that is actually one of the oldest labour and human rights standards in the world. Increasingly these standards, which Canada has ratified, require proactive implementation by employers, and they require governments to take actions to ensure that this human right is protected. My research report for the task force went through how these domestic and international obligations require that kind of proactive protection.

The task force's recommendations, which this bill is asking to be implemented, in fact said that the Canadian Human Rights Act provisions—which at that point covered both the public and private sectors—needed to be amended to reflect that kind of proactive approach and to ensure there was an expansion of coverage to ensure that all kinds of different employees were covered, particularly because of the nature of women's precarious work.

So the flow of the task force recommendations was completely consistent with a whole number of different reports internationally dealing both with the important role that the pay gap played internationally in eroding economic development and women's equality and with the importance of governments taking action.

What we have here, in contrast, is that instead of action being taken to implement the report—which was based on very extensive consultations—we now have a situation where the private sector federally is still covered by an ineffective CHRA process, and we have the federal public service actually in somewhat of a limbo at the moment, because the PSECA, the Public Sector Equitable Compensation Act, is not yet in effect, but the rights of public servants under the Canadian Human Rights Act have been taken away.

That is the situation we currently face.

To give you an idea of some of the contrasts between the recommendation of the task force and the requirements under PSECA, the recommendations of the task force acknowledged that pay equity was a fundamental human right and that because of that you then have to ensure that it can be implemented and ensure an accessible process. The PSECA provisions in fact,say the opposite. They don't ensure that it's a fundamental human right, and in fact they remove that underpinning of the human rights notion from the Human Rights Act and place pay equity essentially, first of all, in a budget-restraint bill—which makes it clear that its main direction is in fact reducing budgets—and secondly, put it in a labour relations statute, where it's left to collective bargaining. That was completely inconsistent both with what the recommendation of the task force was, which is that it should not be left to collective bargaining, and also inconsistent with international standards that require access to a human rights mechanism.

Secondly, the task force, as I say, talked about expanding the notions of coverage, yet PSECA in fact erodes substantive pay equity entitlements. It actually reduces the pool of employees who would have access to the human rights law by actually redefining what women's work is, what kinds of establishments would be covered, and also and most importantly, by introducing the concept of the market and saying that market considerations would now be considered in how we value women's work, when in fact pay equity laws were there to address the market practices that had resulted in the systemic discrimination. So those are the substantive pay equity entitlements.

The second part of it was that the task force recommendations were attempting to set up a more effective process of access, to make it more accessible, to have a specialized commission and specialized enforcement machinery. Instead, we're now put off into this collective bargaining machinery.

The third part of it is that the pay equity task force talked about trying to ensure effective remedial protections. The PSECA statute in fact limits remedial protections by limiting retroactivity that can be paid by putting it into the collective bargaining scheme.

In summary, we would say that in terms of moving forward, the Pay Equity Task Force Recommendations Act is consistent with Canada's international obligations and with its domestic obligations.

Thank you.

[The Vice-Chair, Conservative, Cathy McLeod]

Thank you so much.

Next we have Communications, Energy and Paperworkers' Gisèle Pageau.

[Gisèle Pageau, Human Rights Director, Communications, Energy and Paperworkers Union of Canada]

Good morning, everybody.

I've prepared a statement so that I can stay within the five minutes. I think I'm three seconds over, so I hope you'll indulge me.

The CEP appreciates the opportunity to appear before the standing committee and to comment on proposed Bill C-471. The CEP is one of Canada's largest private sector unions, representing about 120,000 workers in a wide range of occupations across Canada, including both the private and the broader public sectors. The CEP has a longstanding record of defending the human rights of its members, and we have a strong interest in pay equity matters. We were the first union to undertake joint union and management pay equity initiatives in several of Canada's private and publicly owned telephone companies. Our telephone operators lived through a 15-year nightmare as a result of inadequate legislation. The CEP fought hard to bring pay equity to 4,700 women, 18% of whom died before ever seeing any compensation.

We support Bill C-471, which will see the abolishment of the Public Sector Equitable Compensation Act, the long overdue implementation of the 2004 pay equity task force recommendations, and finally will ensure that pay equity remains a human right for all women.

Sex- and gender-based pay inequity is a human rights issue. It is the result of systemic discrimination and societal perception of the value of work traditionally performed by women. Consequently, to consider pay equity as a labour issue to be dealt with at the bargaining table is not only detrimental, it is an inaccurate characterization of the nature of pay inequity. It is imperative that pay equity remain a human rights issue and not form part of collective bargaining schemes.

There are a number of reasons why the characterization of pay equity as simply an aspect of labour or employment law should be avoided. Firstly, to characterize it as such undermines Canada's international commitment to human rights, including equal pay for work of equal value. In a labour context, human rights are paramount, and parties cannot legally contract out of human rights obligations. Forcing pay equity into collective bargaining processes and out of the process of human rights would be to risk the bargaining away or erosion of whatever pay equity gains have been made for women. The rights of disadvantaged groups and minorities should never be subject to the whims of the majority.

Secondly, the inclusion of pay equity as an issue to be negotiated through collective bargaining ignores the systemic and encompassing nature of pay inequity. The systemic discrimination is reflected not just in the organization of workplaces but also in the structure and the strength of the bargaining units and unions. Bargaining units that are predominantly female may invite the replication of patterns and perceptions, or gender segregation and the undervaluing of work. This lends itself to an inherent though sometimes unconscious power imbalance at the bargaining table, thereby undermining the principles that pay equity attempts to promote.

We advocate a proactive, comprehensive, and collaborative model of pay equity legislation for all workplaces. While the CEP believes that individuals should have a mechanism available to them whereby complaints can be initiated, we acknowledge that the complaint-based system alone cannot ensure pay equity compliance. This would include a positive duty on employers to review organizational wage structures and remedy gender-biased pay equity practices. Audits must be conducted thoroughly and consistently to ensure a seamless continuity of pay equity throughout the federal sphere. In addition, employers must be provided with realistic and tangible timelines for the implementation of equitable wage structures and payouts for past discriminatory practices.

It is the view of the CEP that pay equity is not a one-time remedy, but rather pay equity in the workplace must be examined frequently. It should be said that union participation cannot be equated with union responsibility from a compensation perspective. Employers pay wages and are solely responsible for non-discriminatory compensation practices. The inherent power imbalance within the employer-union relationship and the fact that ultimately employers hold the purse strings precludes unions from liability for pay equity.

As you are all aware, the pay equity task force has exhaustively studied this issue. Almost 200 people gave oral presentations. There were 60 written submissions from groups across the country. There were five round-table discussions with multi-stakeholder groups. The task force looked at proactive pay equity legislation in a number of jurisdictions in Canada to identify best practices.

The CEP supports the task force recommendations. This government does not need to reinvent the wheel on this issue. It's time to put it to rest once and for all and do what's right and long overdue for the women of Canada.

Thank you.

[The Vice-Chair, Conservative, Cathy McLeod]

Thank you.

Mr. Farrell, are you doing the presentation for FETCO?

[John Farrell, Executive Director, Federally Regulated Employers - Transportation and Communications (FETCO)]

Yes, I am, thank you.

[The Vice-Chair, Conservative, Cathy McLeod]

Okay. Thank you. You have five minutes.

[John Farrell]

Thank you, Madam Chair.

My name is John Farrell. I'm the executive director of Federally Regulated Employers - Transportation and Communications. Joining me today as an adviser on pay equity matters is Ms. Barbara Gagné, manager of labour relations and classification at Nav Canada, a FETCO member.

I have provided the clerk with a full report of our point of view. It will be translated and will be provided to the committee. Given time constraints, I'll confine my comments basically to those key matters that we believe are important to federally regulated employers with respect to Bill C-471.

First of all, FETCO unequivocally supports pay equity. The vast majority of FETCO members are federal contractors and already comply with section 11 of the Canadian Human Rights Act and with other employment legislation, including the Canada Labour Code and the Employment Equity Act. The challenge is to devise and execute a fair and equitable plan that will achieve pay equity to the extent possible in an appropriate period of time.

FETCO appeared as a witness before this standing committee with respect to the Public Sector Equitable Compensation Act. We gave evidence that we believed certain aspects of this act were beneficial, primarily in that it requires both employers and unions to share the responsibility for equitable compensation. It also proposed, in our view, more efficient, effective, and equitable problem-solving and dispute resolution procedures.

With respect to the recommendations of the pay equity task force, I wish to reiterate FETCO's point of view, which was expressed in advance of the pay equity task force in 2004 and when we made comments on the report of the pay equity task force at that time.

First and foremost, FETCO supports a proactive problem-solving approach to pay equity. However, pay equity has an integral part in the determination of wages and other employment compensation, in conjunction with the many other factors that influence wages and compensation in a market-driven economy. The skill level, effort, responsibility, and working conditions required for a given career path affect wages. So do the supply of persons available and the demand for employees in a given labour market. The state of the company or the organization affects pay equity, and the state of the industry in which the company operates affects pay. The level of unionization of the workforce and the relative strength of the union in its ability to bargain for the bargaining unit and to negotiate wage and benefit increases also affect pay practices. The priorities of the workforce in terms of trade-offs involving wages, benefits, working conditions, work–life balance, and the duration of collective agreements affect pay practices.

Therefore, a full understanding of all the aspects that affect compensation is required in order to develop a plan and redress any inequities that may exist. In addition to possessing an understanding of human rights matters, persons assisting in the resolution of pay equity matters and the adjudication of pay equity disputes must also understand wage and benefit compensation, labour and employee relations, and business economics.

Pay equity legislation must be simultaneously considered in conjunction with the Canada Labour Code. Both employers and unions must jointly be held accountable for achieving pay equity. This must be a bilateral responsibility, not a unilateral employer responsibility, as is currently the case. This is one of our major points. In a unionized environment, it is the employer and the union acting together that make a bilateral agreement about what compensation is to be paid to employees. In fact, the union plays a major role in the distribution of the total compensation package. Both pay equity and collective bargaining are over the same activity: the level, structure, nature, and amount of compensation. In a unionized environment, these two activities must be integrated.

The current process allows unions to negotiate an agreement and then file a complaint under section 11 of the Human Rights Act and claim it has been violated. The end result is additional wage adjustments. In effect, the unions are using pay equity as a means to double-dip. This is one of the principal reasons that pay equity complaints have been protracted and contentious. This double-dipping must stop.

[The Vice-Chair, Conservative, Cathy McLeod]

Could you wrap it up, please? If you could start to wrap it up, that would be great.

[John Farrell]

Yes.

Another very important point in the ability to manage pay equity is the determination of the term “establishment” or “pay equity unit”. We believe that the most appropriate unit for determining pay equity is the bargaining unit, as determined in the certification under the Canada Labour Code.

Employers of course do not unilaterally set wages, benefits, and working conditions for their unionized employees. Thus each collective agreement constitutes an appropriate pay equity bargaining unit. FETCO believes that this is how it should remain.

[The Vice-Chair, Conservative, Cathy McLeod]

Thank you.

Next we have Mr. Durber, from Opus Mundi Canada. Go ahead. You have five minutes.

[Paul Durber, Senior Consultant, Opus Mundi Canada]

Thank you, Madam Chair.

Thank you for the opportunity to come to speak with you this morning.

I want to essentially provide views on the shortcomings of both current pieces of legislation, that is, the Public Sector Equitable Compensation Act as well as the Canadian Human Rights Act, neither of which I believe actually achieve pay equity, in spite of what Mary Cornish has said to you about our international obligations and, one might add, the charter.

It is my view that the PSECA, despite its title--in fact somewhat Orwellian--and its preamble espousing the principle of equal pay for equal work in fact eliminates pay equity from the public sector, through such provisions as not enabling comparison between the pay and work of men and the pay and work of women, as I was able to oversee as director of pay equity at the Canadian Human Rights Commission.

The CHRA, in contrast, is complaint-driven, and that does not give reasonable effect to the principle of pay equity across the private sector. As people have noted, there are really two standards now for pay equity: one for the public sector, which I believe is non-existent; and the other for the private sector, which is the CHRA.

The existence of these two legislative frameworks in fact gives different rights to different groups of people, which in itself is inequitable. The examples of pay equity legislation in Ontario and Quebec show that a single proactive statute is workable, in much the way, as you have just heard, as do some of the principles espoused by FETCO. It enables consistent treatment of women across a whole jurisdiction, which is the federal jurisdiction.

My own advice to this committee would be that the PSECA be repealed and that a single proactive pay equity statute, such as recommended by the pay equity task force, be put in place.

I have a number of problems, which I won't go into a great deal of detail on, in relation to the PSECA. I mentioned that pay equity comparisons are not enabled by that piece of legislation. If you look at it, you will find a definition of “female predominant”, which is pay equity speak for identifying where women work. If you had a pay equity piece of legislation you would find something called “male predominant”. There is no such definition. The principle then of pay equity is in fact abandoned.

Despite the title, despite the preamble, despite the legislation saying it believes in the principle of equal pay for work of equal value, I don't think that it's an effective piece of legislation to that end.

A less fundamental flaw in the PSECA is the shift in the definition of “female predominance”. Under the Canadian Human Rights Act, we have a sliding scale when you try to decide the percentage needed to be female or male predominant: that's 55%, 60%, and 70%. The new threshold is 70% under the PSECA, which is obviously higher for a number of groups. As a result, in the public service, for example, some 42,000 employees in female-predominant groups lose any rights to pay equity; that is, they're no longer female predominant by virtue of that higher threshold. So there are some issues there, particularly since most of those groups you will find, in the private sector and in the labour market as a whole, remain female-predominant occupations.

There are a whole lot of other problems with the PSECA, such as lack of timelines, problems in actually bringing the parties to an actual agreement, which I think people around this table would probably agree with.

The problems with the CHRA are well documented by the pay equity task force. I won't go into them in any detail, except to echo what we heard from FETCO, which is that the complaints-driven legislation is not effective. It doesn't establish a level playing field, and I don't believe this committee should continue to recommend that section 11 be the predominant legislation for the private sector.

So in all, we lack effective pay equity legislation.

Thank you.

[The Vice-Chair, Conservative, Cathy McLeod]

Thank you.

We will now go to Statistics Canada and Marie Drolet.

Are you going to be doing the presentation, or...?

[A voice]

Yes.

[Sylvie Michaud, Director General, Education, Labour and Income Statistics Branch, Statistics Canada]

I would like to begin by thanking the committee for inviting us to make a presentation on the current situation.

Statistics Canada has done research on the gender pay differential. You should all have received a deck which will be used for the discussion.

In order to simplify the explanation, we will be presenting only six slides, but we also have additional ones. So, if you have any questions about the material presented or the additional slides, we will be very pleased to answer them.

Please note that Statistics Canada does not take a position on the proposed amendment to the bill. We are here to present some of the different lenses that can be used to look at this issue of pay differentials between genders.

Marie.

[Marie Drolet, Research Economist, Income Statistics Division, Statistics Canada]

Thank you, Sylvie.

The fact that men continue to earn more than women is not new. My goal here is not to provide a single, definitive answer to what the pay gap is, but rather to present the different measures that are commonly used to describe pay differentials and to show that measurement and methodology matter.

Turning to the first slide, the most commonly cited statistic on the gender pay gap is based on annual earnings. Here, women working full-year, full-time earn 72¢ for every dollar earned by men. This is recent data from 2008 that is publicly available on CANSIM.

An alternative measure is based on hourly wages. Here we see that women on average earn 84¢ for every dollar earned by men.

Why the large difference in the ratios? Well, a caveat of the earnings ratio is that it does not accurately account for differences in work volume. In 2007 full-time men worked on average four hours longer than full-time women. So you can have a gap in earnings simply because men and women worked a different number of hours.

Another caveat of the earnings ratio is that it excludes a significant portion of the workforce. Roughly 65% of women work full-year, full-time, compared with 75% of men.

The ratio based on hourly wages tends to overcome these two problems and has an added advantage of being job-specific, so it makes comparisons between men and women in their jobs much easier to do.

On the next slide we see the trends in the compensation rate ratio. The earnings ratio is a consistent time series starting in 1976, and the wage ratio provides a consistent time series beginning in 1997. Between 1976 and 1992 we see that the earnings ratio increased by about 11%, and after 1992 the earnings ratio is roughly constant.

This differs somewhat from the wage series. Beginning in 1997, we see that the wage ratio increased by 3.2% between 1997 and 2009.

Let us turn to the next slide. What are the factors that explain the gap? In describing wage differences, researchers tend to look at the attributes men and women bring to the labour market. This approach—that is, assuming that wages are tied to the individual worker—is really due to the type of data that's available to researchers; that is, large-scale household survey data. That's what has dominated the empirical literature.

Here we look at differences in work experience. We find that men on average have four years' longer work experience than women, and this difference in work experience accounts for differences in work interruptions, restrictions on number of hours worked per week or number of weeks worked per year. The fact that wages increase with experience, coupled with the fact that men and women have a different amount of work experience, explains about 11% of the wage gap.

It's also a well-known fact that both men and women have been increasing their educational attainment in recent years; however, they still choose traditional disciplines. Wages differ by field of study, and men and women are in different disciplines; this accounts for about 4% of the wage gap.

The next bullet on this slide looks at men and women belonging to different types of workplaces. This is an analysis that comes from a linked employee-employer data set. Here we learn that characteristics of the workplace explain more of the gender pay gap than the characteristics of the worker.

So when we think about the wage ratio and we adjust for things that we think matter, such as experience, education, and where men and women work, we see that on average women earn a little more than 90¢ for every dollar earned by men.

[The Vice-Chair, Conservative, Cathy McLeod]

This will be the time to wrap it up fairly quickly, in order to be fair to everyone.

[Marie Drolet]

Okay.

Despite the long list of factors that we include in these studies, a substantial portion of the pay gap cannot be explained by these factors. There are numerous factors that we can't account for that could explain these pay differentials.

I'll just turn to the last slide.

My goal here was to highlight the fact that the gender wage inequality is complex—it requires analysis from a number of different perspectives—and to show you that measurement does matter. We went from an earnings ratio of 72¢ for every dollar earned by men to one based on a wage ratio that is 80¢ and then to an adjusted ratio that is closer to 90¢.

[The Vice-Chair, Conservative, Cathy McLeod]

Thank you.

I'd like to thank all the witnesses. I know it's hard to put a very complicated subject into five minutes, but I'm sure that with questions we'll get to elaborate much more on all the presentations.

We're going to start with a seven-minute round for both questions and answers.

Ms. Neville is first, from the Liberals.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you very much, Ms. McLeod.

And thank you to all of you for coming out. Some of you have been here before, and we appreciate your coming back.

My first question is to Ms. Cornish.

You made reference to international standards. I wonder if you could elaborate on the international obligations and requirements.

[Mary Cornish]

Certainly.

When the UN was started way back.... There's a treaty of nations back in 1917 that actually referred to equal pay at that point. That's why we say it's one of the first standards.

The ILO Convention 100, which Canada ratified in 1972, is the main “equal pay for work of equal value” standard. That standard is also part of what's called the “core labour standards”, which world governments and the UN have all said are the basic standards that need to be implemented.

In addition, the UN Covenant on Economic, Social and Cultural Rights also includes equal pay for work of equal value as one of the main contexts of that set of economic, social, and cultural rights.

The Beijing Declaration of the UN World Conference on Women, which is updated every five and ten years by world governments, also includes equal pay for work of equal value.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you.

We've heard a lot about proactive legislation. The government says that PSECA is proactive legislation. We're saying it's not proactive.

I wonder how you would define “proactive pay equity”. I would ask Ms. Cornish and anybody else who wants to answer that.

[Mary Cornish]

“Proactive”, in terms of the obligations, has been a requirement first of all that you implement equal pay for work of equal value, and we say the PSECA doesn't do that. But most importantly, what it does is say that it is a requirement for employers to incorporate within their practices and have plans for. They don't wait for complaints, which the old CHRA system does, but have to promptly move to establish a proactive planning process that identifies the discrimination that exists in the workplace and sort out how it will be eliminated.

That proactive part of it is in fact having a plan and having specific timelines in which you eliminate the gap. We would say that PSECA doesn't do that.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you.

[John Farrell]

I could comment, if you wish.