With the deadline for Canadians to contribute to their RRSP for the 2025 tax year approaching on March 2, 2026, the concerning 17% gender pension gap highlights that women deserve policies that make their retirement contributions count.
Even though Canada has a robust retirement income system, women have been receiving less retirement income than men for decades. This is a result of a systemic imbalance that weakens economic security for all Canadians.
In 2024, Ontario’s Pay Equity Office with Dr. Elizabeth Shilton, feminist litigator, labour lawyer and pension expert, published the ground-breaking research paper, Understanding the Gender Pension Gap in Canada. The report found that although Canada’s retirement income system is recognized as one of the strongest in the world and retirement incomes have increased substantially for all Canadians, not all Canadians equally benefit. Men have consistently fared better than women, leading to a persistent gender pension gap of 17%, which means that women earn $0.83 for every $1.00 that men earn in retirement income.
This trend is still relevant and concerning today, even though the report was published over a year ago. The gender pension gap impacts Canadians not only during their retirement; it is an indicator of gender inequity at various stages of their career.
The Gender Pension Gap (GPG) is the difference between retirement income received by men and women. The Gender Pension Gap in Canada is measured across the three “pillars” of Canada’s retirement income system:
- Pillar One: Old Age Security (OAS) and Guaranteed Income Supplement (GIS).
- Pillar Two: Canada Pension Plan (CPP)/Québec Pension Plan (QPP).
- Pillar Three: Private Retirement Income.
In 2020, approximately 200,000 more women than men aged 65+ were living below Canada’s low-income cut-off. Digging deeper, 21% of women aged 75+ had incomes below this threshold — a concerning 51% higher than their male counterparts of similar age. This highlights a longstanding inequity that requires immediate action.
The report, Understanding the Gender Pension Gap in Canada, found that women spend fewer hours in the paid labour market, and when they do, they are more likely than men to earn lower wages. These factors contribute to the persistent gender earnings gap, leading to women having less earnings to contribute to their savings and retirement plans than men, which ultimately results in the gender pension gap. Of Canadians between the ages of 35 and 64 years old, women were more likely than men to report having no savings. When surveying the number of Canadians who have less than $5,000 in savings, 1 in 2 women (49%) report having less than $5,000, compared to 1 in 3 men (33%).
Factors Causing the Gender Pension Gap:
- 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. Women are less likely to have personal retirement savings due to lower incomes and fewer opportunities for financial investment.
- Historical Bias: Canada’s public pension system was and still is designed for heterosexual couples with a male breadwinner. Pillar Two of Canada’s retirement income system is based on earnings and contributions, which historically favours 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.
- Caregiving: 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 part-time, 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.
- 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.
There are various interrelated causes of gendered differences in income. To close the gender wage gap, and ultimately the gender pension gap, the report provides actions that employers, policy makers, and individuals can take now.
Today, we have three calls to action for stakeholders to close the gender pension gap.
- Modernize pension systems to make them more inclusive and reflective of the workforce. Pension outcomes are shaped by evolving pension systems and labour market factors, yet the retirement income system in Canada and elsewhere have not fully kept pace with major changes in family dynamics and women’s workforce participation. In Canada in the 1960s, women represented about 30% of the labour force; by 2024, that figure had risen to approximately 85%. The workforce of today looks very different than it did over 60 years ago.
Over time, the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP) have evolved to introduce important features that help mitigate gender-based inequities, such as mandatory universal coverage plans, dropout provisions for child-rearing years, and survivor benefits. These features demonstrate how thoughtful policy design can help reduce pension inequities while still maintaining a connection to workforce participation. - Promote comprehensive workplace policies. Workplace policies such as equal pay audits, paternity leave, and flexible work arrangements can help remove systemic barriers that impact women’s participation and advancement in the labour market. Strengthening policies that support equitable earnings and career opportunities will contribute to narrowing both the gender wage gap and, over time, the gender pension gap.
- Organize with key players and measure outcomes. Success requires coordinated action across the government, employers, and pension providers, guided by clear timelines, measurable outcomes, regular monitoring of key metrics, and a commitment to continuous improvement. It is critical we understand that the gender pension gap is not a women’s issue – it is a structural issue that affects economic security for all.
To learn more about the gender pension gap, download our report on Understanding the Gender Pension Gap in Canada.
Visit https://payequity.gov.on.ca/what-we-do/ for more information about the Pay Equity Office.
