A new analysis published by Ontario’s Pay Equity Office (PEO) finds women in Canada, on average, received 18% less retirement income than men in 2020. This gap is three percent higher than the 15% gap observed in 1976, the earliest year for which data is available (Statistics Canada). While this Gender Pension Gap (GPG) has fluctuated over the decades, it has not narrowed.
Unfortunately, the GPG is a persistent global phenomenon. The average GPG across 34 member countries in the Organization for Economic Cooperation and Development (OECD) was 25.6% (OECD, 2021). Domestically, a GPG can be observed in every province in Canada, with the narrowest gap in Prince Edward Island at 13% and the widest gap in Alberta at 23% in 2020 (Statistics Canada). When looking at the gap through an intersectional lens, a GPG is observed in all visible minority groups, with the narrowest gap between Japanese women and Caucasian men at 24% and the widest gap between West Asian women and Caucasian men at 64%.
Kadie Ward, Commissioner and Chief Administrative Officer of the PEO believes these findings warrant attention. “We see that the Gender Wage Gap (GWG) has narrowed with time. Meaning, women’s wages in Canada have steadily increased with time to be closer to that of men’s, although the gap has not closed completely. A natural assumption would be that with increased wages, the pension gap would also begin to close with time, but this does not appear to be the case”.
Indeed, Canada’s GWG has narrowed over the decades and women’s labour force participation has increased. As more women work and earn an income, they are also contributing financially towards their pensions. And yet, women are receiving significantly less retirement income than their male counterparts. Although the GPG is still an under-researched topic, there are several possible explanations for why the GPG persists. As pension payouts largely depend on the financial contributions of workers, deeply seated gender norms and discriminatory practices may help explain the gap. Women are more likely to work fewer years than men over the course of their careers as they exit the labour force (either temporarily or permanently) after having children, are more likely to work part-time to juggle caregiving responsibilities, and generally earn lower wages than men (the GWG). The GPG can therefore be seen as one of the compounded impacts that the GWG has on women’s long-term economic well-being.
“The impacts of the GPG should not be dismissed. Aging in poverty is linked to food insecurity, housing insecurity, and overall poor health outcomes, including higher rates of mortality. As the world commemorated International Day of Older Persons on October 1st with the theme of “Resilience and Contributions of Older Women”, there is no better time to call attention to not only the contributions of women around the world but the need for equal pay, better social protections, and shared domestic work between men and women” states Commissioner Ward.
- A GPG exists in Canada and has not narrowed over time. The GPG was 15% in 1976 and 18% in 2020
- The gap for private retirement income (such as workplace and personal pensions) for seniors in Canada was 28% between men and women in 2020. This means that for every $1 of private retirement income a senior man received, a senior woman received $0.72
- Women consistently receive more Old Age Security and Guaranteed Income Supplement than men in Canada. As payment is calculated based on age, marital status and level of income (as opposed to contributions during working years), this may signify that women are consistently receiving lower income during retirement years and therefore qualify for more government support
- Women in Canada are at an increased risk of living in poverty in old age. The prevalence of women who are 75 years old and over and living with low-income status was 21% compared to 13.9% of men in the same age group
- When looking at the gap through an intersectional lens, a GPG is observed in all visible minority groups, with the narrowest gap between Japanese women and Caucasian men at 24% and the widest gap between West Asian women and Caucasian men at 64%. In other words, for every $1 that a retired Caucasian man received in Canada, a retired West Asian woman in Canada received $0.36