Canadian women make 89 cents for every dollar men earn. Can new federal legislation narrow that gap?

Gender equality advocates and labour experts say legislation going into effect later this summer likely will work to reduce the pay gap between women and men in some Canadian workplaces — though it remains unclear whether those gains will ripple out across the larger economy.

Ottawa announced on Wednesday that its Pay Equity Act will go into effect on August 31, about three years after the legislation was first unveiled.

"I think it's a start in a good direction, but I do think we need to get into that deeper discussion and deeper regulation ... to make sure more people benefit," said Andrea Gunraj, vice president of public engagement at the Canadian Women's Foundation.

While Gunraj was generally positive about the legislation, she said its effects will be restricted to a tiny share of working Canadians.

"It's hard to say that it's going to have this big impact across our whole labour market," she said.

The new legislation means that employers in federally regulated sectors with 10 or more employees will have three years to identify and correct pay disparities within their workforces — disparities which most often result in women earning less than men.

Women in Canada's workforce earn approximately 89 cents for every dollar earned by men, according to the federal government. A 2018 report by Statistics Canada found that women earned 87 cents for every dollar earned by men.

Women also suffered more severe and longer-lasting economic losses than men during the pandemic, according to Statistics Canada and numerous reports.

About 1.3 million people, or six per cent of Canadian workers, are employed in federally regulated sectors and will be affected by the new legislation.

That includes industries such as banking, air travel, railways and most Crown corporations, among others.

How to define 'work of equal value'

Labour Minister Filomena Tassi said her government's new approach to pay equity will have a "transformative" effect on the persistent earnings gap that women face.

The regulations are meant to address that issue by forcing employers to conduct thorough reviews of their workforces with the goal of providing employees "equal pay for work of equal value."

In other words, employers can't just calibrate salaries for women and men in the exact same positions. They will instead have to identify all roles in their organizations that provide similar levels of value, and then increase salaries when jobs are found to be underpaid.

Employers will have to consider the "skill, effort, responsibilities, and working conditions of those jobs," says the legislation.

"We see women occupying professions in caregiving, in services, and those professions have predominantly been undervalued," Tassi told CBC News.

Canada's pay equity commissioner Karen Jensen will be able to levy $30,000 fines on employers with up to 99 staff that don't comply, and $50,000 fines on those with larger workforces.

Legislation leaves 'a lot of room for interpretation'

But the value of different jobs is open to interpretation, something which could complicate workforce reviews, warns Jordan Kirkness, a labour and employment lawyer at Baker McKenzie.

He said the federal government has provided strong guidelines for employers to conduct those reviews, though he expects that disputes related to the act are inevitable.

"Complying with the act is not just a matter of following simple instructions. There's a lot of room for interpretation," Kirkness said.

Still, he described the regulations as a positive step and said they are more comprehensive than pay equity laws already in place in some provinces.

Also unclear is whether the legislation will have any effect on employees in workplaces not governed by federal regulations.

Tassi said the government is displaying "strong leadership" on pay equity, but organizations outside federal jurisdiction will not be required to follow the new rules.

Gunraj said that might happen in some cases — especially if workers and labour groups push for the changes.

"It's a good indication of what needs to happen at large. And it's perhaps a way for people who are in unionized sectors to say, 'Hey this is happening here, how about we do this in our sector as well?'" she said.

NDP critic for women and gender equality Lindsay Mathyssen said she was happy to see the legislation come into effect — although she noted that it arrives "far too late" to address the economic disparities made worse by the pandemic.