The gender budget

The Canadian federal government said it took an “historic and meaningful step” towards gender equality last week, in announcing proactive pay equity legislation for the federally regulated sector.

“We know that we can’t make this necessary change happen for all Canadian women overnight,” said Finance Minister Bill Morneau in presenting the $337.5-billion budget. “What we can do is lead by example. And it is our hope that in doing so, all employers will reflect on the way in which work done by women has been too often undervalued — and move to take action of their own to help close the gender wage gap.”

Alongside the gender equality measures were announcements of a new “use-it-or-lose-it” leave for new parents, changes to tax benefits for low-income workers, and the formation of an advisory council to study the feasibility of a national pharmacare program.

Gender equality

The government’s attempt to increase female participation in the workforce and society included applying a gender-based analysis to each individual budget decision.

The budget also included measures to support greater numbers of women in management and leadership positions, including a push to aid female entrepreneurs.

“For the first time in our history, there are now more Canadians aged 65 and older than there are people under the age of 15,” said Morneau.

“That presents a real challenge. Who will step in to fill the gap left as more and more seniors leave the workforce?”

Looking to boost the participation of women in the workforce, including jobs traditionally dominated by men, the Liberal government is allocating $19.9 million over five years for a pilot apprenticeship incentive grant to give women up to $6,000 for training in skilled trades.

The government is also putting in place measures to address the gender wage gap by “shining a light on pay practices in the federally regulated sector” and moving forward with a proactive pay equity regime that will be tabled later this fall.

Gender equality and pay equity is a valid and important goal for the government, said Patrick Snider, skills and immigration policy director at the Canadian Chamber of Commerce in Ottawa.

“Inclusion of women in the workforce is something that we are absolutely supportive of, and we want to make sure that the labour force and management has as many of Canada’s best and brightest, and is as productive as possible.”

However, it’s important to address these issues in the most effective, productive way, he said.

“A lot of this is a question of how this gets implemented in the weeks and months to come.”

The government’s commitment to pay equity “definitely represents a big shift” in the national mentality, said Chandra Pasma, policy analyst at the Canadian Union of Public Employees (CUPE) in Ottawa.

“We’re really happy to see the commitment to pay equity,” she said. “We’ve certainly been waiting a very, very long time to see a commitment — but we still have to wait for the legislation now to see the details.”

Second parent leave

Another significant announcement for employers to digest was the unveiling of the Employment Insurance Parental Sharing Benefit, through which a new father or second caregiver would be able to take five weeks off from work to share in the responsibilities of raising a baby.

Beginning in June 2019, the benefit will be available to parents who agree to share parental leave, and is intended to allow new mothers to re-enter the workforce more easily, said Morneau.

The move comes on the heels of a major paternity and maternity leave overhaul in last year’s budget, which extended parental leave from 12 to 18 months, with 12 months of payments spread over that time period.

“The principle behind making sure that both parents have equal opportunity to raise their children is one that’s noble,” said Ashley Ziai, senior policy analyst at the Canadian Federation of Independent Business (CFIB) in Montreal. “That first year is a very precious time for parents to spend with their children.”

Employers would be wise to make arrangements for the new leave in their policies as soon as possible, said Andrew Tsoi-A-Sue, principal for Eckler, a benefits consultant company in Toronto.

“I don’t see it as a massive impact to most employers,” he said. “They just need to make sure their leave policies are compliant.”

“This new benefit has to be a sharing benefit — that’s the key. If you really think about what the impact will be, it’ll just be a higher possibility of one-half of a couple taking an additional five weeks.”

While CUPE welcomed the move, the union also wished it had pushed slightly further, said Pasma.

“We’re happy that there’s the additional weeks, but the way that it’s put forward right now, it just replicates the existing inequities in the employment insurance system.”

As it stands, not enough people will have access to the benefit, as the low wage replacement too often makes it an unaffordable option, she said.

CUPE would have preferred the federal government followed Quebec’s framework, which has a lower eligibility threshold for parental leave benefits, combined with a higher benefit replacement rate, said Pasma.

Pharmacare, benefits

The federal government is also creating an advisory council on the implementation of national pharmacare, which will recommend options on how best to move forward “to ensure every Canadian has access to the medicine they need.”

Adopting a national program would have significant cost implications for employers offering prescription drug benefits, said Tsoi-A-Sue, as privately sponsored employer plans’ overall spend on drug claims would likely be significantly reduced.

“It’s, potentially, quite a major savings to the employer benefit costs for a private plan,” he said. “We’re guardedly optimistic or excited about this.”

However, costs to pay for the program will mean increases to other government revenue-generation streams, said Tsoi-A-Sue.

“It’s not going to be simply savings, it will be savings offset by increased costs.”

Additionally, the federal government is targeting low-income workers through a rebranded benefit, now known as the Canada Workers Benefit — meant to expand eligibility for workers earning at or below the poverty line, and allowing them to take home more money while they work.

The measure is an improvement for the program, previously known as the Working Income Tax Benefit, said Pasma.

“It’s never lived up to its promise as a tool for increasing the incomes of low-income workers.”

The budget also expressed a commitment to help workers in times of change by building on the Innovation and Skills Plan. This would involve increased funding and consolidating business innovation programs to make them easier to navigate and more responsive to the challenges and opportunities businesses face “today and in the future.”

The government also said it will propose legislative amendments to the Wage Earner Protection Program Act to increase the maximum payment to seven weeks of employment insurance insurable earnings from four.

Changes will also be made to make eligibility for the program more equitable, so workers who are owed wages, vacation, severance or termination pay when their employer files for bankruptcy or enters receivership receive greater support.

Questions remain

The free-spending budget came with a price, however — an $18.1-billion deficit.

“If budgets aren’t balanced, they’re going to have to either cut spending or raise taxes down the line,” said Snider. “Right now, we’re in the middle of good times, economically speaking, so what happens when there’s a slowdown and we run into problems?”

Overspending on social programming could reduce the country’s ability to react to changes in the economy, domestically or abroad, he said.

Overall, the budget left employers searching for answers to important big-picture questions, said Snider.

“What’s the strategy to come out of deficit? What’s the strategy for competitiveness?” he said. “The government really needs to step up and do a better job of answering some of those questions.”

“The disappointment we have is there hasn’t been that attempt to step back and look at the overall picture of: What is the total burden, the total cost of doing business? Where are the areas we can find efficiencies, simplify? Where can we help Canadian businesses operate a little more efficiently?”