Pay equity has organizational and economic benefits. When organizations comply with the Pay Equity Act and adopt other equitable workplace practices, they are better equipped to retain talent, reduce turnover costs, and foster more diverse and inclusive workplaces, positioning them for stronger financial outcomes. As seen from Statistics Canada research, on a larger scale, policies that enable women to work and earn more, like the Pay Equity Act, are contributing to boosting the Canadian economy.

Reducing Costs Through Retention

Employee turnover represents a high and growing cost for Canadian businesses. According to a 2026 survey, Canadian businesses spend an average of $30,680 per employee on turnover-related expenses (up 5% from last year). This includes the costs of lost productivity, recruiting, onboarding, and training.

When employees do not believe that pay practices in their organization are equitable, they are more likely to consider leaving. The weight of pay inequity is evident in a 2023 ADP Canada survey, which found that the majority of Gen Z (63%) and Millennial (53%) respondents would consider leaving their roles if they experienced gender-based pay inequities. Proactively avoiding pay inequities is a clear strategy to retain staff.

A 2026 Randstad report found that Canadians rated reliable pay and benefits as one of the top factors contributing to a strong sense of job security. Aligning employer and employee values is beneficial to companies’ retention rates and financial success. Ensuring fair, equitable pay fosters a sense of job security for employees and reduces turnover.

Boosting the Economy

Pay equity is good for women and good for the economy.

Inclusive workplace practices such as pay equity not only lead to greater financial performance at the organization level; they also enable women to stay in the workforce which boosts the national economy overall. In 2024, women aged 25 to 54 in Canada had a record-high labour participation rate of 85%. The increase in women’s labour participation rate has driven Canada’s real gross domestic product (GDP) per capita 13% higher than it would have been otherwise. In 2024, this represented an increase of $8,658 in income for each Canadian. This showcases that women’s participation in the labour force, and policies that boost their participation, result in gains for the greater Canadian economy.

Women’s Spending Power

Pay equity increases the amount of money women earn, which is significant for women’s economic independence and spending power. The Business Development Bank of Canada (BDC) recognizes that, through direct purchasing power and influence, women are responsible for 75% to 80% of consumer spending, which amounted to about $1.2 trillion in 2023.

Conclusion

In Canada and globally, inclusive policies and practices like pay equity are valued by, and valuable to, companies and their workers.

Pay equity is more than a compliance obligation; it is a meaningful way to reduce turnover, strengthen business performance, improve profitability, and contribute to long-term economic growth. Paying equitably, increasing gender diversity, and closing the gender wage gap are all intertwined and boost the Canadian economy.

Pay equity is a legal requirement for public-sector employers and private-sector employers with 10+ employees in Ontario. For more information on obligations and compliance, visit: https://payequity.gov.on.ca/i-hire-in-ontario/.