Gender Wage Gap

Key Messages

Putting the gender wage gap in context

Much progress has been made worldwide in female educational attainment and labour force participation. Yet despite this progress and decades of anti-discrimination legislation and equal rights provisions in Canada and many of its peer countries, women still earn less than men. The United Nations’ latest human rights report on Canada notes the “persisting inequalities between women and men” and the “high level of the pay gap” that “disproportionally affects low-income women, in particular minority and indigenous women.¹

Eliminating the wage gap between men and women is critical to achieving inclusive and cohesive societies and to sustaining economies. Women’s work should not be undervalued, nor should women’s skills be underutilized. Closing the gender wage gap will boost economic growth and have a positive impact on other key societal measures such as income inequality and poverty. Equal pay for equal work needs to go from being a goal to becoming a reality.

How is the gender wage gap calculated?

The OECD, which is the source of the peer country data, calculates the gender wage gap by taking the difference between male and female full-time median weekly earnings as a share of male median full-time weekly earnings. The gender wage gap for the provinces and territories was calculated the same way using Statistics Canada data.

How do the provinces fare relative to Canada’s peers on the gender wage gap?

Among the provinces, P.E.I. is the standout performer. The province gets a “B,” but with a wage gap of 10.7 per cent it places fourth overall, after Belgium (3.3), Denmark (6.3), and Norway (7.1). Manitoba rounds out the top five with a wage gap of 13.2 per cent.

The next highest-ranking province, New Brunswick, places 9th overall and also gets a “B” with a gender wage gap of 14.3 per cent, in line with peer country the Netherlands (14.1). Ontario (16.2), Quebec (16.4), and Nova Scotia (16.4) get “C” grades with gender wage gaps comparable to those in the U.K. (16.9), the Switzerland (16.9).

Overall, Canada ranks 13th among the 16 peer countries and gets a “C” grade with a gender wage gap of 18.2 per cent. Saskatchewan (21.6), British Columbia (22.6), and Alberta (24.6) are all “D” performers with gender wage gaps in the 22 to 25 per cent range. These three provinces rank ahead of only one peer country, Japan (25.9).

Newfoundland and Labrador (28.9) gets a “D–” for having the highest wage gap among all jurisdictions—the gap in weekly full-time earnings between men and women is close to 30 per cent.

How do the provinces perform relative to one another?

P.E.I.’s gender wage gap of 10.7 per cent is the lowest among all the provinces. Manitoba ranks second among the provinces with a gap just over 13 per cent. New Brunswick, Ontario, Quebec, and Nova Scotia all do better than the national average, with gender wage gaps between 14 and 16 per cent. Saskatchewan, British Columbia, and Alberta all have gender wage gaps between 22 and 25 per cent. Newfoundland and Labrador has the highest gender wage gap among all the provinces, at almost 30 per cent—close to three times the rate in top-ranking province, P.E.I.

How do the territories fare?

Nunavut is an A+ performer with a gender wage gap of only 2.2 per cent, less that of top-ranked peer country, Belgium. Yukon also does well with a gender wage gap of 7.95 per cent, comparable to that of other “A” performers, Denmark and Norway.

N.W.T. is at the opposite side of the spectrum. The territory’s gender wage gap of 23 per cent is similar to that of “D” performers Saskatchewan, British Columbia, and Alberta.

Is the gender wage gap in Canada and the provinces and territories closing?

Canada and most of its provinces and territories have seen the gender wage gap narrow in recent decades. Overall, between 2000 and 2016, the gap in Canada decreased by 24 per cent, falling 6 percentage points from 23.9 per cent to 18.2 per cent.

Nova Scotia, New Brunswick, and Manitoba improved the most, narrowing their gender wage gaps by 34 per cent or more since 2000. Among the territories, Yukon did remarkably well, halving its gender wage gap between 2000 and 2015.

The only province moving in the wrong direction is Newfoundland and Labrador. The province’s gender wage gap in 2016 was over 2 percentage points higher than in 2000.

Is the gender wage gap a result of women working fewer hours?

Part of the gender wage gap can be explained by the fact that women often work fewer hours than men because they typically take on a greater role in domestic responsibilities, particularly child care. So, the wage gap calculated using weekly earnings is not an ideal measure, as it reflects not only compensation but also the number of hours worked.

The gender pay gap calculated using median hourly wages instead of weekly earnings is a better measure because it excludes information on choices of how much to work and better reflects actual compensation for work. Unfortunately, internationally comparable data on hourly wages are not available—the OECD only compiles data on the gender wage gap using weekly earnings. However, it is possible to calculate the gender pay gap based on hourly wages for Canada and the provinces and territories using Statistics Canada data.

The gender pay gap calculated using hourly wages is lower for Canada and all the provinces and territories than it is when calculated using weekly earnings. Overall, Canada’s gender pay gap based on hourly wages is 12.5 per cent—i.e., women earn 12.5 per cent less per hour of work than men. This is 5.7 percentage points lower than the wage gap calculated using weekly earnings.

P.E.I. remains the province with the lowest pay gap—in fact, the gender gap using hourly wages is only 1.3 per cent. New Brunswick jumps into second place with a pay gap of 3.9 per cent. Manitoba remains a top-performing province, with a gender pay gap of 8.8 per cent. Quebec moves ahead of Ontario in the rankings with a pay gap of 8.9 per cent. Nova Scotia (9) and Ontario (11.4) also have gender pay gaps below the national average. Saskatchewan (16.1), British Columbia (17.2), Alberta (18.8), and Newfoundland and Labrador (20) remain at the back of the pack with gender pay gaps ranging from 16 to 20 per cent.

The performance of Nunavut and Yukon on gender wage gap using hourly wages is similar to their performance using weekly earnings—both territories do well. Yukon’s gender pay gap was 2.4 per cent in 2015 while Nunavut’s pay gap was 0.54 per cent in favour of women.

N.W.T. does much better using this measure. Its pay gap of 11.9 per cent based on hourly wages is 11 percentage points lower than the gap calculated using weekly earnings.

Is the gender wage gap a result of women working in lower-paying professions?

One reason for the gender wage gap is the over-representation of women in lower-paying professions. In 2016, roughly two-thirds of employed women were in the following occupations: office support, administrative, health, education services, and sales and service. In contrast, less than one-third of men were employed in these occupations. Among health occupations, over 30 per cent of women were in nursing, while 21 per cent of men in health occupations were in nursing.²

But even in comparable jobs, women make less than men. A Statistics Canada study showed that among full-time workers aged 25 to 54 in broadly comparable industries and occupations, women’s wages were 91 per cent of men’s wages in 2011—in other words, the gender wage gap was 9 per cent for comparable industries and occupations.³

Within generally higher-paying occupations, the gender wage gap varies by occupational groupings. For example, for senior management occupations, the gap in hourly wages was 6 per cent in 2016, in favour of women. But, the wage gap varies greatly by year, averaging to just over 8 per cent in the five years between 2012 and 2016. The wage gap for “professional occupations in business and finance” (which includes auditors, accountants, and investment, human resources, and business service professionals) was 10.7 per cent in 2016. For “professional occupations in natural and applied sciences,” the pay gap was 8 per cent in 2016. These occupations include engineers, architects, mathematicians, computer and information systems professionals, and life and physical science professionals.

Within each of these occupational groupings, the gender wage gap also varies among professions. For example, within the engineering profession, there is huge variance in the wage gap depending on the discipline. For chemical engineers, the gap in hourly wages between men and women is 3.9 per cent; for aerospace engineers and industrial and manufacturing engineers, the gap is 24 per cent.⁴

For university-educated women, the wage gap widens quickly after graduation. According to a study of people who graduated from seven Canadian universities from 2005 to 2012, one year after graduating with a bachelor’s degree, men earned $2,800 more than woman, and eight years after graduation they earned $27,300 more. The wage gap eight years after graduation is widest for business and engineering graduates.⁵ While women may make choices within a broad area of study that have less earnings potential over time, and women’s life choices, particularly related to child care, affect career growth and hence earnings, “pure labour market discrimination” is likely also a factor explaining the widening gender gap in wages.⁶

In many occupational clusters and sectors, the existence of male-dominated cultures also affects career advancement and earnings of women. For example, in the mining industry, women believe they are not offered the same opportunities as their male colleagues because of “preconceived notions about physical strength, leadership ability, and willingness to travel to remote locations.”⁷ Women are often cut out of key developmental assignments in “pack up and go” work environments because they need more planning time to integrate work and family lives.

Why is Newfoundland and Labrador’s gender wage gap so high?

The higher concentration of women in lower-paying occupations helps explain part of the high gender wage gap in Newfoundland and Labrador.

In 2016, 87 per cent of women in the province were employed in four occupational groupings: sales and service occupations; business, finance, and administration occupations; health occupations; and occupations in education, law, and social, community, and government services. Two of these four occupational groupings had a weekly median salary below the provincial average of $910.

Conversely, just over 80 per cent of men in Newfoundland and Labrador were employed in five occupational groupings (trades, transport, and equipment operators and related occupations; sales and service occupations; natural and applied sciences and related occupations; occupations in education, law, and social, community, and government services; and business, finance, and administration occupations), three of which had above-average median weekly salaries.⁸

A higher representation of women in lower-paying occupations tells only part of the story though. Even among the same occupational groupings, there is a significant pay gap between men and women. For example, for sales and service occupations, the pay gap in weekly earnings is over 20 per cent. For occupations in education, law, and social, community, and government services, the gender pay gap is a whopping 46 per cent.⁹

What can be done to help close the gender wage gap in Canada?

Regardless of whether we look at weekly or hourly wages, or comparable occupations and industries, the fact remains that a gender pay gap persists in Canada and most of its provinces and territories. How can we close this gap?

One way is to encourage more women to seek employment in higher-wage occupations. Encouraging women to pursue degrees in traditionally male-dominated fields, such as science, technology, engineering, and mathematics (STEM) can make a difference. Early exposure for young girls to STEM fields helps, as do mentorship programs.

But it’s not enough for women to join male-dominated fields, such as STEM disciplines, if they ultimately do not have a good labour market experience, do not feel satisfied with their jobs, or believe they are being treated unfairly. According to a study by the American Association of University Women, women engineers who were most satisfied with their jobs “worked for organizations that provided clear paths for advancement, gave employees challenging assignments that helped develop and strengthen new skills, and valued and recognized employees’ contributions.”¹⁰ Clearly, good management plays a big role in attracting and retaining highly skilled women. This applies not only to engineering fields but to all high-skilled, higher-wage occupations.

Improved workplace policies also make a difference. Flexible hours, telecommuting, and parental leave all help women balance the demands of work and family. In most households, domestic responsibilities are not equally shared, with women taking on a greater role. More women than men take parental leave, and women are often the primary caregivers for children. Career interruptions and working fewer hours can hurt career development and advancement, in turn affecting wages. Making child care more affordable and encouraging men to take parental leave are also critical to narrowing the gender wage gap. Quebec has made a notable difference on both fronts. Thanks to subsidized child care, Quebec has the lowest child care costs in the country.¹¹ Furthermore, fathers of newborns are entitled to up to five weeks of specific paternity leave (as opposed to the general parental leave available in Quebec and across Canada).

While more women in higher-paying occupations and industries, flexible workplace policies, and affordable child care would no doubt make a difference, discrimination and unconscious biases must also be addressed. This can be achieved if organizations and governments are transparent about hiring practices, wages, and requirements for promotions. Organizations can address issues only if they know they exist, and this can be achieved only by monitoring and disclosing information on salaries, promotions, and recruitment.

For example, the U.K. government recently introduced a plan that would make it mandatory for companies with 250 or more employees to report on gender wage gaps and gaps in bonus pay among men and women starting April 2017.¹² Belgium, which has the lowest gender pay gap among the comparator jurisdictions, implemented similar legislation in 2012—companies with at least 50 employees must produce a gender pay gap report every two years.¹³

Progress on this front is also being made in Canada. In 2016, the organization Women in Communications and Technology (WCT) announced its “Up the Numbers” program, an initiative to increase the engagement of women in the digital economy. Through this program, WCT is enlisting employers in technology and communications fields to disclose metrics on the “engagement of women in various roles and at various levels in their organizations.”¹⁴ WCT will be working with “companies, governments and academic institutions to establish best practices and strategies to recruit and advance women in the digital economy and to maintain a focus on achieving gender parity.”¹⁵ To date, four companies, which together employ over 75,000 Canadians, have joined the initiative: Pythian Technologies, TELUS, Accenture Canada, and Rogers. Closing the gender wage gap requires exposing the issue and opening up a dialogue through education and leadership.

Footnotes

1    United Nations, International Covenant on Civil and Political Rights, Concluding Observations on the Sixth Periodic Report of Canada, August 2015, 2.

2    Statistics Canada, CANSIM table 282-1042, Labour Force Survey Estimates (LFS), by National Occupational Classification (NOC) and Sex (accessed March 2017).

3    Reneé Morissette, Garnett Pico, and Yuqian Liu, The Evolution of Canadian Wages Over the Last Three Decades, (Ottawa: Statistics Canada, Ottawa, March 2013), 48.

4    Statistics Canada, custom data order.

5    Ross Finnie, Kaveh Afshar, Eda Bozkurt, Masashi Miyairi, and Dejan Pavlic, Barista or Better? New Evidence on the Earnings of Post-Secondary Education Graduates: A Tax Linkage Approach (Ottawa: Education Policy Research Initiative, The University of Ottawa, July 26, 2016), 24.

6    According to the director of the Education Policy Research Initiative and University of Ottawa professor, Ross Finnie, in Don Butler, “Study Finds Widening Gender Gap in Earnings Among Post-Secondary Graduates,” Ottawa Citizen, July 26, 2016.

7    Women in Mining Canada, Ramp-Up: A Study on the Status of Women in Canada’s Mining and Exploration Sector, February 2010, 24.

8    Statistics Canada, CANSIM table 252-0152, Labour Force Survey Estimates (LFS), Wages of Employees by Type of Work, National Occupational Classification (NOC), Sex, and Age Group (accessed March 2017).

9    Ibid.

10    American Association of University Women, Solving the Equation: The Variables for Women’s Success in Engineering and Computing (accessed July 2016).

11    Maire Sinha, Child Care in Canada (Ottawa: Statistics Canada, October 2014), 9.

12    U.K. Government Equalities Office, Mandatory Gender Gap Pay Reporting, February 2016.

13    Hildegard Van Hove, Some Facts About the Gender Pay Gap in Belgium, July 2015.

14    Women in Communications and Technology, Digital Economy Leaders and WCT Commit to “Up the Numbers,” news release, May 2, 2016 (accessed October 2016).

15    Women in Communications and Technology, Rogers Joins WCT’s Up the Numbers Campaign, news release, September 27, 2016 (accessed October 2016).