The Gender Pay Gap in Canada: Understanding the Persistent Disparity and Strategies for Change

Despite significant advancements in gender equality, the gender pay gap remains a pressing issue in Canada. As of 2023, women working full-time earn approximately 87 cents for every dollar earned by men, indicating a persistent disparity that requires comprehensive understanding and targeted action.​

Understanding the Gender Pay Gap

The gender pay gap refers to the average difference in earnings between men and women. In Canada, this disparity is influenced by several interrelated factors:

• Occupational Segregation: Women are often concentrated in lower-paying industries such as healthcare, education, and retail, while men dominate higher-paying sectors like engineering and technology. This segregation contributes significantly to the wage gap.​

• Work Experience and Career Interruptions: Women are more likely to take career breaks for caregiving responsibilities, leading to reduced work experience and slower career progression. This "motherhood penalty" can result in long-term earnings disparities. ​

• Discrimination and Bias: Unconscious biases and discriminatory practices can result in women receiving lower wages than men for similar work. These biases can influence hiring, promotions, and salary negotiations, perpetuating the pay gap.​

• Negotiation Practices: Studies have shown that women are less likely to negotiate salaries, which can lead to lower initial pay and compounded disparities over time. This reluctance is often due to societal norms and fear of backlash.​

• Representation in Leadership: Women are underrepresented in senior leadership positions, which are typically higher-paying roles. This lack of representation limits women's earning potential and perpetuates the wage gap.​
  

These factors are interconnected and often compound one another, making it essential to address them holistically to effectively close the gender pay gap.​

Strategies for Closing the Gender Pay Gap

1. Conduct Regular Pay Audits—And Act on the Findings

What to do:

• Use pay equity analysis software or an external consultant to compare salaries across gender, race, and job level.

• Ensure audits account for bonuses, benefits, and stock options, as women are often under-compensated in these areas.

Beyond the Audit:

• If a pay gap is found, close it. Implement immediate salary adjustments instead of waiting for the next hiring cycle.

• Set up a long-term pay equity plan with quarterly reviews to ensure gaps don’t reappear.

• Communicate results transparently to employees—acknowledge where gaps exist and outline how they’re being addressed.

2. Implement Transparent Pay Structures—No More Salary Guesswork

What to do:

• Create clear salary bands for each job role and make them publicly available to employees.

• Remove salary history from hiring decisions to prevent past pay disparities from following women throughout their careers.

Beyond Implementation:

• Train managers on how to discuss salary openly with employees, eliminating secrecy around pay decisions.

• Establish an internal pay equity committee that reviews pay practices annually and ensures consistency across departments.

3. Promote Women Into Leadership Roles—With a Structured Pathway

What to do:

• Set clear targets for women’s representation in leadership (e.g., "By 2026, 40% of leadership roles will be held by women").

• Require diverse shortlists for promotions and executive roles (if a leadership role is open, at least 50% of candidates must be women).

Beyond Promotion:

• Pair women with executive sponsors who can advocate for them in leadership discussions.

• Redesign performance reviews to remove biases that penalize women for displaying leadership traits (e.g., being assertive).

4. Offer Flexible Work Arrangements—And Make Them Standard

What to do:

• Implement core working hours (e.g., 10 AM – 3 PM) so employees have flexibility in when they start and finish their day.

• Offer remote and hybrid work as the norm, not just as special accommodations.

Beyond Flexibility:

• Ensure flexible work doesn’t stall promotions. Women working remotely should have equal access to leadership roles and visibility.

• Adjust productivity metrics—measuring success based on impact, not hours worked.

5. Enforce Accountability—Tie Pay Equity to Performance Metrics

What to do:

• Make pay equity a business metric, just like revenue and profitability.

• Hold managers accountable for pay disparities within their teams—tie pay equity to executive bonuses and performance reviews.

Beyond Accountability:

• Create a public pay equity report to show progress and encourage industry-wide change.

• Regularly survey employees on pay satisfaction to catch issues before they escalate.

6. Comply with Legal Requirements—And Go Beyond the Bare Minimum

What to do:

• Ensure compliance with Canada’s Pay Equity Act, which mandates equal pay for equal work.

• Proactively adjust salaries before employees have to file a complaint.

Beyond Compliance:

• Lobby for stronger policies in your industry—pay equity laws are still evolving, and companies can be part of shaping fairer legislation.

• Go beyond legal requirements by offering additional benefits (e.g., paid parental leave, return-to-work programs) that help close the pay gap.

Final Thoughts

The gender pay gap is a systemic issue, but organizations have the power to close it with real action. It’s not enough to conduct audits or set targets—companies need to act on their findings, ensure pay transparency, and embed equity into their business strategy.

Want to take real steps toward pay equity in your organization? Erin Davis Co. provides:

• Inclusive leadership training

• Custom policy development to close wage gaps

• Diversity, Equity, and Inclusion (DEI) Strategy Development

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