Nearly half of Ontario’s workforce are women, but on average they earn less than men, despite high levels of education and participation in the workforce. The existence of a gender wage gap means that there continue to be barriers to women achieving their full economic potential.

There are compelling reasons to address this issue. Many countries, including our closest competitors and trade partners, are examining ways to close the gender wage gap. It would increase the economic security of women and their families – provide opportunities for Ontarians and improve the lives of children. It would also lower women’s chances of living in poverty during their working lives and in retirement.

Ontario businesses also could gain from closing the gap. A 2005 report from the Royal Bank of Canada estimated that if women in Canada had the same labour market opportunities as men, personal incomes would be $168 billion higher each year. Many women will graduate from post-secondary education, or rejoin the workforce, with the skills and abilities necessary to fill the anticipated vacancies created by the shortage of skilled labour. We need to use all available talent (both men and women) to ensure Ontario’s future economic stability.

Research shows that equal opportunity employers attract talented staff with better morale and motivation, resulting in increased productivity. Ensuring that women are able to fully participate in the workforce, using their education and skills, should lead to higher productivity rates for the province, increasing the province’s potential for economic growth.

Background: The Gender Wage Gap

The gender wage gap is the difference between wages earned by men and women. It is often presented as a percentage. The smaller the percentage, the fairer it is for women.

There are many ways to measure the gender wage gap. Some common ways are:

  • Hourly Earnings (Average or Median) – All earners
  • Annual Earnings (Average or Median) – Full time / Full year earners
  • Annual Earnings (Average or Median) – All earners

All of these show that, on average, women earn less than men. The most recent data available from Statistics Canada shows that Ontario’s gender wage gap ranged from 12% (average hourly earnings – all earners) to 31.5% (average annual earnings – all earners) in 2011. (For statistical profile and gender wage gap trends, see the Appendix.)

The gender wage gap tends to become wider over a women’s working life, in almost all industries and sectors. More women than men work in minimum wage jobs and more women take time away from work, or exit the labour market altogether for caregiving activities contributing to the overall gap. This impacts families, whether both parents work or whether there is only one parent responsible for the household. It may mean that families will have less money to provide a reasonable standard of living for their children: lack of resources for housing, food and care, paying for computers and other technology needed to develop the appropriate skills, or funding for children’s extracurricular activities.

In retirement, women are less financially secure than men and experience higher risk of living in poverty.

Some women, like Aboriginal women, women with disabilities or immigrant women, face even more challenges in the workplace. The gender wage gap is higher for these women.

According to researchers, the gender wage gap is affected by many factors including: age and marital status, education, job tenure, unionization, hours of work, occupational segregation, and business practices rooted in stereotypes about women and work.

Regardless of how it is measured, the gender wage gap signals a greater, underlying problem of labour market and workforce inequality.

Current Measures

For many years Ontario has recognized that the gender wage gap needs to be closed. There are many initiatives and programs that help in overcoming some of the barriers that working women face, including: increase in daycare spaces, availability of junior kindergarten, changes in the school curriculum to teach students about the gender wage gap. To address discrimination, Ontario has three key laws that are relevant to the gender wage gap. Each has different eligibility requirements and time limitations. These laws have different goals, but all relate to the workplace.

Pay Equity Act

Pay equity is commonly referred to as ‘equal pay for work of equal value’. Pay equity recognizes that, historically, women and men have tended to do different kinds of work and that work traditionally performed by women has been undervalued and underpaid.

The purpose of Ontario’s Pay Equity Act (PEA) is to correct systemic gender discrimination in compensation for work performed by employees in female job classes. The PEA requires all public sector employers and all private sector employers with 10 or more employees to identify and correct any gender discrimination in their pay practices. They are to adjust the wages of their employees in female job classes so that they are at least equal to the wages of their employees in comparable male job classes based on skill, effort, responsibility and working conditions.

Employment Standards Act, 2000

Ontario’s Employment Standards Act, 2000 (ESA) sets out minimum rights and responsibilities that apply to workers and employers in most Ontario workplaces.

The “equal pay for equal work” provision in the ESA requires that men and women receive equal pay when they perform substantially the same kind of work in the same establishment, if their performance requires substantially the same skill, effort and responsibility, and their work is performed under similar working conditions.

Ontario Human Rights Code

Ontario’s Human Rights Code (the “Code”) prohibits actions that discriminate against a person based on a protected ground in a protected social area.

The protected grounds include family or marital status, gender identity, gender expression, sex (including pregnancy and breastfeeding), sexual orientation, disability, race, ancestry, citizenship and age. Protected social areas include employment and contracts.

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