Equity in Canadian Workplaces
Equity
This is the third in a series of blog posts where I have examined diversity and inclusion in Canadian workplaces and I found that while important progress has been made, a lot of work remains. Today I explore equity within workplaces. Equity is understood to be the fair treatment of equity deserving groups including women, Black, Indigenous and persons of colour (BIPOC), persons with disabilities and 2SLGBTQ+ folks. Three important markers of equity within Canadian workplaces are who holds senior management and executive positions, what people are being paid, or pay equity, and which companies are awarded contracts, or supplier diversity.
Leadership
Diversity in terms of leadership and senior management positions is a key indicator of equity. Affirmity, in its global workforce study, found 57% of the persons they surveyed said racialized persons comprised only 20% of their leadership teams and women comprised the same percentage (20%). Jensen found that 40% of nonprofit organizations surveyed reported that less than 10% of senior managers were from equity-deserving groups, with 17% reporting having no such persons in these roles. On their boards of directors, 30% of organizations said less than 10% of their board directors were from underrepresented communities. These results indicated that while not-for-profit organizations have advanced diversity, these organizations did not promote diverse folks into leadership positions. This is a serious gap.
The data revealed that Canadian not-for-profit organizations were not promoting diverse staff to senior level and board of director positions, so how are Canadian businesses doing? The Canada Business Corporations Act requires all publicly traded/ listed companies to report on diversity within their boards of directors and executive officers. In MacDougall, Valley and Jeffrey’s review of these diversity disclosure reports, they found that for companies listed on the Toronto Stock Exchange (TSX), women held 26% of seats on corporate boards of directors. This represented a 2.5 times increase from 2015 when women held only 10% of those positions. They also reported that of companies listed on the S&P/TSX Composite Index, women comprised one-third of corporate board directors, and 36% of corporate board positions at S&P/TSX 60 listed companies. The top 3 industries with the highest percentage of women corporate directors and executive officers were: utilities, communication and media, and financial services. The authors explained these results were achieved because more companies created diversity policies and set targets for recruiting women to their boards. This finding revealed that when intentionality was met with action through setting recruiting targets then equity goals could be realized
Having considered gender equity above, let's turn our attention to race and abilities. For all companies governed by the Canada Business Corporations Act, only 10% of corporate board positions were held by Black, Indigenous, racialized persons, or persons with disabilities. Breaking this result down further, Indigenous persons held only 8 corporate board seats in both 2021 and 2020, Black and racialized persons held 143 of those seats in 2021 compared to 106 in 2020, and persons with disabilities held only 11 seats in 2021 and 8 in 2020. In terms of executive officers, only 2 Indigenous persons were executive officers of publicly-listed companies in both 2021 and 2020, 138 Black and racialized persons were executive officers in 2021 versus 122 in 2020, and only 11 persons with disabilities were executive officers in 2021 and 8 were executive officers in 2020.
When compared to the Canadian population, the percentage of Indigenous, Black and racialized, persons with disabilities appointed to corporate board and executive positions was far below the demographic figures. For example: Indigenous peoples comprised 5% of the Canadian population, as per the 2021 Census data, but held less than 1% of corporate board seats and executive officer positions in mid-2022. Black and racialized persons comprised 22% of the population, but held only 8.3% of board positions while persons with disabilities, aged 25 to 64, made-up 24% of the Canadian population, yet they accounted for only 0.6% of board and executive officer positions. Corporate Canada has a long way to go to achieve more equity in leadership positions.
I recently read a great example of setting and meeting inclusion targets. The Black North Initiative announced this week that TD Bank met its goal of promoting more Black staff to executive positions. In 2020, TD decided it would increase the number of Black executives at the bank by 50% and it achieved this goal. Setting diversity targets for racial and disability inclusion can be a helpful way for workplaces to achieve their targets, as has been done with gender in companies publicly traded and listed on public stock exchanges..
Pay
Pay equity is a second important equity metric. Only 9% of survey respondents in the study completed by Affirm said their companies examined pay inequity. Jensen’s research showed that salaries in Canada’s not-for-profit sector were below that of the national average. In the sector, the average pay was $38,716 compared to the national average salary of $57,137, which was almost one-third lower than the national average! Both Imagine Canada and Charity Village found that Canada’s not-for-profit sector was very diverse and employed a high number of women, BIPOC folks, persons with disabilities and 2SLGBTQ+ persons, yet the average salary in the sector was lower than that in the for-profit and public sectors. Some of this difference could be attributed to how the different sectors raise funds to pay salaries, i.eGrant funding versus sales and government revenue, but by leaning deeper into the data, it was apparent that low-wage, low-benefit, short-term and contract jobs were common in the non-profit sector due to short-term, project-based funding. Underfunding means working conditions and benefits could be subpar, and professional development and opportunities for promotion could be limited. In addition, underfunding is connected to systemic discrimination where overall the social services or charitable sector is undervalued and the paid labor of equity-deserving groups within the sector is also undervalued and thus underpaid.
In 2018, the Government of Canada passed the Pay Equity Act making it law that all federally regulated workplaces with 10+ employees achieve equal pay and eliminate gaps in pay based on gender as of August 2021. Banking, transportation, federal agencies such as Canada Post, and the federal government are all required to comply with this legislation and the Office of the Pay Equity Commissioner was created to help companies meet this requirement. It was determined that women still earn less than men in 2021, but the pay gap for full-time workers closed to 10% where women earned $0.90 for every $1 men earned. The Pay Equity Office in Ontario, which was formed in 2015 to oversee Ontario’s Pay Equity Act, reported that in terms of hourly wages, the wage gap in Ontario was 11%, so women earned $0.89 for every $1 men earned and in terms of annual salaries, the page gap was much larger at 29%; women earned only $0.71 for every $1 men earned.
The 2016 national census broke down Canada’s gender pay gap by race and found that on average, the gender pay gap was 48% for racialized women, compared to 32% for Caucasian women. Among racialized women, West Asian women experienced the largest gap at 58% and Japanese women had the lowest gap at 33%. It will be interesting to know what the 2021 Census data revealed once those results are released.
Ontario’s Pay Equity Commissioner also reported on the pay equity gap in pension earnings. It was determined that the gap in pension received by Canadian women and men was 20% in 2020 and this had increased from 15% in 1976. Considering pensions from private or company retirement plans showed a pension gap of 28% in 2020, so retired women earned only $0.72 for every $1 retired men earned.
A pay gap of 10% might not seem like a huge deal; however, if you consider that gap over 40 years of a woman’s career, this loss of earnings adds up quickly. And then add this lost income to the lower pensions women receive to the fact that on average, women outlive men, then it is evident that this is a serious issue that requires our attention. One way employers should address this is by assessing pay equity for employees and setting a goal of achieving pay equity in 5 years.
Supplier Diversity
A third measure of equity, or fairness, in workplaces is the diversity of the companies, vendors and suppliers that companies contract. This is often an overlooked area and should not be excluded. Companies and organizations need to examine with whom they do business. The federal government is doing specific outreach to women, Black and Indigenous business owners in their attempts to increase supplier diversity. These businesses should consider becoming certified women or racialized business owners by the respective national associations to increase their access to government contracts. Participating in conferences, expos and trade shows are other opportunities for women and BIPOC business owners to understand procurement processes and gain access to contracts with buyers.
How do you feel workplaces are doing when it comes to workplace equity? What other indicators should employers use to assess equity? Please email me and let me know your thoughts.
Thanks so much for reading today’s post!
Michelle
References
Affirmity. 2022. The Future of Diversity, Equity and Inclusion 2022. HR Research Institute.
CharityVillage. 2022. Diversity in Canada’s not-for-profit sector.
Jensen, E. 2022. Diversity is our strength: Improving working conditions in Canadian not-for-profits. Imagine Canada.
MacDougall, A., Valley, J. and Jeffrey, J. (2022). Report 2022: Diversity disclosure practices - Diversity and leadership. Osler Canada.