02/22/2018 07:52 EST | Updated 02/22/2018 09:01 EST

Canada's gender pay equity strategy likely to stop short of Iceland's: experts

TORONTO — Gender equity and business experts have their fingers crossed that the forthcoming federal budget will deliver long-awaited legislation to make the workforce more equitable for women, but few expect the Canadian government to come close to a bold move made by Iceland earlier this year— fining businesses who fail to institute pay equity measures.

The Liberal government has signalled that next Tuesday's budget will include initiatives to improve the economic success of women and promote gender equality, potentially through narrowing the pay equity gap, ensuring more gender equality in boardrooms and easing access to capital for female entrepreneurs. 

Prime Minister Justin Trudeau told the World Economic Forum in Davos, Switzerland last month that his government will introduce legislation this year to ensure equal pay for work of equal value in federal jobs. Canada has long struggled to tackle the wage gap, with the most recent numbers showing women on average earn 87 cents for every dollar made by a man.

And yet, even as the government gets ready to table a federal budget that applies gender-based analysis to its policies, women in business advocacy groups are skeptical that the Canadian government will do anything as bold as Iceland. The nordic country is believed to be the first to require both public and private companies with more than 25 employees to reach pay parity.

"I think we need to take a more aggressive stance, but I don't anticipate that we will see anything like Iceland," said Tanya van Biesen, the executive director of Catalyst Canada, a non-profit organization advocating for women's advancement in the workplace.

The groundbreaking law, which came into effect in January, forces companies to seek certification every three years from an auditor that will verify that their efforts have been successful and that any pay disparities have been based on fair terms, including education, performance or skill. Companies that fail to attain certification face fines of up to 50,000 ISK (CA$630) a day.

Companies with more than 250 employees will have until the end of 2018 to reach the requirement, while smaller businesses will be given up to three years.

The legislation met with little resistance in the Nordic nation that has ranked first in the World Economic Forum’s Global Gender Gap standings for nine consecutive years, said Brynhildur Heiðar- og Ómarsdóttir, the executive manager of the Icelandic Women's Rights Association.

"We are a small country with only 340,000 people, so if we have ideas, then they are quick and easy to gain acceptance," said Heiðar- og Ómarsdóttir. "I would imagine it is a lot easier for us than a country as big as Canada.”

Similar legislation "would be a hard pill to swallow" in Canada, which is often less comfortable with government intervention than Iceland, said van Biesen.

Sarah Kaplan, the director for the University of Toronto's Institute for Gender and the Economy, isn't convinced Iceland's legislation would be completely effective in Canada because she worries employers would use allowances for differences in experience as an excuse to let disparity fester.

However, Kaplan said introducing legislation similar to Iceland's would at least mandate more transparency around wages being earned by private sector workers or those who fall outside so-called sunshine lists, which disclose the salaries of public sector employees making more than $100,000.

She said reporting such information would help Canadian companies know where they stand and ensure parity can be measured between all job levels and categories.

Kaplan and van Biesen are also calling for a "use-it-or-lose-it" paternity leave for an extended period of time, which Kaplan said "would take men out of the workforce as frequently as women when it comes to new babies," which in turn could help close the gender pay gap.

Trudeau floated the idea of creating such a system earlier this week during an event on his tour of India, just days before the release of the federal budget on Feb.27.