03/08/2020 09:43 EDT | Updated 03/09/2020 15:50 EDT

Canada's Gender Pay Gap Sees Some Good News For A Change

But that last stretch needed to close the income gap entirely could be the toughest.

Morsa Images via Getty Images
RBC's study found working-age women now control $3.4 trillion in wealth, or 46 per cent of the total.

MONTREAL ― After years of bad news about Canada’s gender pay gap, a new study looking at how things have changed for women financially over the past four decades may have actually found some good news.

Ahead of International Women’s Day on Sunday, economists at Royal Bank of Canada decided to take a big-picture look at the country’s gender wealth and wage gaps over time.

“In our previous IWD reports, we focused on the gaps that women face, in terms of pay or because they take a hit to earnings when they have a baby,” authors Dawn Desjardins, Andrew Agopsowicz and Carrie Freestone wrote. 

“While these gaps persist, this year we’ve chosen to highlight the financial gains Canadian women have made.”

Watch: Gender norms are still behind Canada’s wage gap. Story continues below.


The long-term trends they found in Statistics Canada’s data is encouraging. While the gap hasn’t closed yet, there has been serious headway. From 1976 to today, women increased their share of income from 25 per cent to 42 per cent. 

Collectively, that amounts to a $240-billion raise for women, in today’s dollar terms, compared to what they were making in 1976, the RBC economists noted.

RBC Economics
Women's share of income has jumped to 42 per cent in recent years, from 25 per cent in 1976. The pace of growth has slowed in recent years.

But that last stretch needed to close the income gap entirely could be the toughest.

“Women still tend to spend more time out of work because of children, so even if women ended up working at the same rates as men we should expect a gap to remain,” said Andrew Agopsowicz, study co-author and a senior economist at RBC.

“Much of the convergence over the past thirty years has been because of the closing of the employment rate gap (58 women were employed for every 100 men in 1976, today that number is over 90), so I don’t think we can rely as much on that channel going forward.”

RBC’s own forecast shows that, over the next decade, women’s share of income will improve by only one percentage point, to 43 per cent of all income.

In some demos, women beat men

On wealth, the study found working-age women now control $3.4 trillion in wealth, or 46 per cent of the total. And women in some demographic groups are richer than their male counterparts.

“Single women without children outpace single men without children, with a net worth of $250,000 compared to $230,000 for men,” the RBC study said.

These women have exceeded men on home ownership, with 40.2 per cent of women without kids owning their own homes, compared to 38.2 per cent of single men without kids.

But single dads are still much likelier than single moms to own their own home ― 62 per cent versus 38.2 per cent.

Yet even single moms have made progress on homeownership ― they have “seen the largest gains in net worth when it comes to non-financial assets,” Agopsowicz wrote in an email to HuffPost Canada.

“This complements nicely with the rise in female homeownership – single mothers seem to have also been able to increase their stake in the housing market.”

The report found that the net worth of single moms ― that is, their assets minus their debt ― tripled between 1999 and 2016. These women are increasingly likely to be in the workforce, and are increasingly likely to have a retirement nest egg.

RBC Economics
Single moms have tripled their net worth over the space of two decades, largely due to more of them being in the workplace and more of them owning real estate, RBC says.

This was helped along by the expansion of maternity leave benefits from six months to a year in 2000. The change “helped link Canadian women more permanently to long-term employment relationships,” the report said.

Women are increasingly building their own retirement savings, helped by the fact they tend to concentrate in public sector jobs such as teaching and nursing, which typically come with defined-benefit pension plans that are harder to come by in the private sector.

There is good news as well for senior women, who back in the day suffered from some of the highest poverty rates in our society; they have now nearly closed the retirement income gap with men.

RBC Economics
The gap in what women collect from the Canada Pension Plan or the Quebec Pension Plan has narrowed from more than 50 per cent to less than 6 per cent, as women have increasingly been making their own contributions to the retirement fund.

The poverty rate among single senior women has dropped significantly, from 42 per cent in 1985 to 29 per cent today, essentially closing the gap with single senior men, the RBC report noted.

All of it means women are seeing improved standards of living, while growing in importance in the economy.

“Women are ... increasingly responsible for paying rent, mortgage, taxes and electricity bills within the household,” the report said. A quarter of women identify themselves as a primary household maintainer, up from 9.3 per cent in 1976.

Women are shifting “from jobs to careers,” the report noted, and today a higher share of women hold a university degree, diploma or certificate than men.

“The shift to careers ― higher-paying positions with longer tenures ― has paid significant financial dividends,” the report concluded.

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