The gender pension gap in Canada measures the gender difference in combined income from Canada’s 3-pillar system of retirement income instruments: Old Age Security/Guaranteed Income Supplement, Canada Pension Plan/Quebec Pension Plan and private pensions (including RRSP/RRIF income).  In 1976 – the first year for which we have meaningful statistics – that gap stood at 15%, and it has stubbornly refused to close despite substantial increases in overall retirement income and massive advances in women’s labour market engagement and earnings since that date. It currently stands at about 17%, which means that for every dollar of retirement income men receive, women get only 83 cents. This report examines the roots of the gender pension gap, providing a detailed look at how Canada’s retirement income instruments operate to convert gender wage gaps and gendered hours of paid work into lower pensions for women.

The report identifies two primary obstacles to closing the gap: Canada’s increasing reliance on private pensions, the most gender-unequal pillar in the 3-pillar system, and women’s unequal share of unpaid family care work, which impedes their capacity to increase their share of paid work. 

A confident woman reviewing paperwork.
  • Persistent Gap: A gender pension gap (GPG) exists in Canada and has not narrowed since 1976 when it was 15%. As of 2021, the GPG was 17%, despite women’s increased labour force participation.
  • Size of the Pension Gap: Women receive 83 cents for every dollar men receive in retirement income, with the average retirement income for Canadian women in 2021 at $36,700 and the median at $29,700.
  • Global Ranking: Canada ranks 12th out of 47 countries in the Mercer CFA Institute 2023 Global Pension Index. In 2021, the GPG in Canada was 17% according to Statistics Canada and 21.8% according to the OECD. In comparison, the average GPG across 34 OECD countries was 25.6%, with Estonia the lowest (3.3%) and Japan the highest (47.4%).
  • Disproportionate Impact: In 2020, 200,000 more women aged 65+ lived below Canada’s low-income cut-off than men, with 21% of women aged 75+ having incomes below the cut-off, 51% higher than men of similar age.
  • Factors causing the Gender Pension Gap:
    • Childbearing and child-rearing. Women are more likely than men to exit the labour market (temporarily or permanently) after having children. In 2015, the employment rate of women with children under the age of 6 was 69.5%, yet the employment rate of men with children under the age of 6 was 90.8%, signaling a 21.3% gap. Women’s employment rate increases with the age of their children but never catches up to that of men’s.
    • Women are more likely than men to work part-time due to caregiving responsibilities. In 2021, 24.4% of all Canadian female workers were part-time compared with 13% of all male workers. Women’s most-cited reason for working part-time was caring for children. Available data states that “one quarter of women reported caring for children as their reason for working parttime, compared to 3.3% of men”. Furthermore, women who work part-time may not be eligible to enroll in their workplace pension plan if they work fewer hours than their employer’s threshold.
    • Unpaid domestic labour is still mostly performed by women. In 2017, 89.9% of insured mothers in Canada took maternity/parental leave – at reduced income level – compared with 11.9% of insured fathers/partners.
    • The existing gender wage gap (GWG). Two of the three “pillars” of Canada’s pension system are designed to be tied to earning power. Canada’s gender income gap was 28% (2021) for average annual earnings, and 11% (2020) for average hourly earnings.
    • Historical Bias: Canada’s public pension system was and still is designed for heterosexual couples with a male breadwinner.
  • Canada’s Retirement Income System: The GPG in Canada refers to the disparity in retirement income between men and women, measured across the three pillars of Canada’s retirement income system:
  • Pillar One: Old Age Security (OAS) and Guaranteed Income Supplement (GIS). OAS/GIS is a social pension, administered by the Government of Canada. An individual must have an income less than $134,626 (as of 2023) to qualify and payment amounts are based on age, marital status and income. Employment history is not a factor in determining eligibility (i.e., payments are not based on contributions). Pillar one is designed to be gender-neutral but favours women given their longer life expectancy compared with men. It indirectly addresses gender biases by providing essential financial support to women, who may have less access to other retirement income sources.
  • Pillar Two: Canada Pension Plan (CPP) / Québec Pension Plan (QPP). CPP/QPP is a mandatory, public contributory pension plan administered by the Government of Canada and Government of Québec, respectively. With CPP, an individual’s pension payout is based on their earnings, their contributions, and the age they decide to start collecting pension. The QPP is funded by contributions made by individuals who work in Québec and their employers. Pillar two embodies traditional gender biases. It is based on earnings and contributions, which historically favour men who have had higher incomes and longer work histories. This perpetuates the gender pension gap as women often earn less over their lifetimes and may have gaps in their employment due to caregiving responsibilities.
  • Pillar Three: Private Retirement Income. Private Retirement Income comes from sources such as workplace pension plans and personal plans (e.g., registered retirement savings plans). They are voluntary, private contributory pension plans. Not all individuals purchase a personal plan and not all employers provide workplace pension plans. In fact, three-quarters of Canadian adults are not covered by workplace pension plans. Pillar three represents gender biases in access to workplace pension plans and personal retirement savings. Women are disproportionately affected by the lack of workplace pension coverage due to factors such as the gender wage gap and part-time employment. Women are also less likely to have personal retirement savings due to lower incomes and fewer opportunities for financial investment.