The Gender Pension Gap and Equal Pay

In Canada, the gender pension gap is a growing factor of senior poverty that disproportionately affects older women and reduces their well-being, in terms of health and economics. The impact of the gender pay gap extends across the lifespan of most women¹ in Canada. This blog illuminates the interaction of the gender pay gap with the gender pension gap.²  

What is the gender pension gap? 

The gender pension gap is the difference in retirement income between older men and women aged 65 and older.ⁱ Using data from Statistics Canada, the Pay Equity Office of Ontario calculated the gender pension gap to be 17% across Canada in 2021, meaning for every dollar a man receives in retirement income, a woman will receive 83 cents on average.ⁱⁱ  

The gap widens when looking at private retirement income. Private retirement income comprises voluntary employer or personal retirement plans such as workplace pension plans or personal retirement plans like a registered retirement savings plan (RRSP) or pooled registered pension plan (PRPP)ⁱⁱⁱ. In Canada, for every dollar a man receives in private retirement income, a woman receives 75 cents.^iv   

What factors cause the gender pension gap?  

One major driving force for lower pensions is the systemic challenges women face in the labour market as they progress through their professional journey. As reflected by the gender pay gap, women typically earn lower wages than men. This is in part because women are more likely to work part-time due to caregiving responsibilities for children or the elderly.^v  

Additionally, women remain under-represented in high-earning executive and leadership positions. In 2023, approximately one-third of corporate director roles (34.8%) and executive officer roles (32.3%) are held by women, a slight increase compared to 2022. ^vi Unfortunately, there is also a decrease in women in senior management roles (39.1% in 2023, down 2.8%) and senior management pipeline roles (42.9%, down 11.9%).^vii Diminishing gender diversity in senior management and pipeline management roles means women’s wages will remain stagnant, resulting in less earnings and savings for retirement.   

In the public sector, the gender pay gap is narrowing.^viii The public sector typically offers employer or union-based pension plans for woman-dominated occupations, such as education, healthcare, and public administration. Indeed, Statistics Canada reports that women have surpassed men as members of a registered pension plan (RPP) offered by employers or unions, with 2 in 3 women having an RPP being in the public sector compared to 2 in 5 men.^ix However, a closer analysis reveals that the declining gender pay gap in the public sector is associated with salary caps being placed on high-earning professions (e.g. senior management and health professionals) rather than an increase in women’s wages (MacDonald, 2024). Therefore, the gender pay gap appears to be decreasing on paper, in reality, women’s earning potential remains stunted even if they are in well-paid professions such as health care and senior management in the public sector because of salary caps. Over the long-term, women professionals in the public sector still will not be able to match the private retirement contributions of male professionals in the private sector.   

Private pension plans often lack a gender-based analysis (GBA+) in design, another contributing factor to the gender pension gap.^x  Private pension plans are market-driven, meaning that they are earnings-based and do not account for the gendered employment patterns such as part-time or short-term employment or career gaps that many working women experience.^xi For example, defined contribution (DC) plans privilege early contributions to enable greater return on investment. Unfortunately, this design feature often coincides with the life phase of pregnancy or raising children for women, resulting in contribution gaps and reduced pension payouts in the long run.^xii

Although contributory plans are now regulated to continue to accrue pension benefits while employees are on parental or emergency leave,^xiii professional women who are also mothers experience a “motherhood penalty.” The “motherhood penalty” refers to women who are mothers being perceived to be less competent or loyal by employers, which in turn contributes to reduced wages and thus, impacts their financial ability to contribute to private pensions plans. ^xiv The significant pay gap between employed mothers and fathers, for instance, demonstrates the financial penalties for working mothers; for men with children in the public sector, their hourly wage is 7% higher than women with children, which doubles in the private sector where men with children earn 14.9% more than women with children.^xv 

Another contributing factor is intimate partner violence. Women are more likely to be survivors of intimate partner violence (IPV), and thus experience the deleterious consequences IPV has on employment histories and finances. For example, controlling and isolation tactics used by the abuser affect a woman’s capacity to build professional networks and skills, impact a survivor’s access to basic documentation or needs necessary to gaining employment, such as stable housing, personal government IDs, professional clothing, and computer or internet access.^xvi Survivors may also need to take time away from work entirely to address legal and safety concerns related to the abuse. This can lead to resume gaps that are difficult to explain to potential employers.^xvii Many IPV survivors also experience economic and financial abuse through which the abuser aims to sabotage education or employment opportunities, control access to finances and economic resources (like transportation, food, and clothing) or exploit the survivor such as stealing or gambling a survivor’s wages.^xviii Economic and financial abuse often continues after leaving an abusive relationship, leading to lasting economic and financial setbacks. The factors discussed compound over the life course to impact a woman’s ability to create economic and financial security in retirement.  

What is the social cost of the gender pension gap? 

Poverty amongst Canadian older adults is an epidemic. Poverty undermines the financial security, health and well-being of older Canadians. The latest National Ageing Survey in Canada shows the link between income and health: 40% of Canadians aged 50 years and older are neither in good health nor have inadequate household incomes (about 6 million older Canadians).^xix 

Across Canada, 11% of women aged 55-64 are low-income (after tax), growing to 14% of women aged 65-74 and 21% for women over the age of 75.^xx In Toronto, 2 out of 5 (42.4%) of older women (65+ years) have after-tax incomes that are below $20,000, compared to one-third (31.2%) of older men in Toronto with incomes below $20,000.^xxi  

The gender pension gap is a structural issue contributing to older women’s poverty and ill-being. With the rising costs of living and increasing demands on the Canadian healthcare system and other care services to support older adults ageing in place, the gender pension gap acts as a barrier for senior women to be able to achieve economic justice and an equitable standard of living in Canada.  

What can be done?  

Addressing the gender pension gap requires tackling interconnected aspects of gender inequality. Some key areas to address include closing the gender pay gap, improving gender diversity and inclusion in the workplace, and ensuring supports for survivors are accessible to rebuild their lives. 

WomanACT works collaboratively to eradicate gender-based violence through research, education, and advocacy. Learn more about our work and how you can get involved as a community ally to survivors of violence: https://womanact.ca/  

For more information, resources, and training about elder abuse prevention, visit Elder Abuse Prevention Ontario or Canadian Network for the Prevention of Elder Abuse.  

For crisis and safety planning for older adults experiencing elder abuse or gender-based violence, please call the 24-hour/7 days a-week Seniors Safety Helpline: 1-866-299-1011 (Ontario residents only) or 1-866-299-0008 (TTY).   

For more senior supports and services across Ontario, search 211.ontario.ca.  

For more supports and services specific to gender-based violence, search Mulberry Finder.  

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1. The terms “women” or “woman” used in this blog are inclusive of all woman-identifying individuals, including trans women, cis-gendered women, and non-binary persons.

2. This blog focuses on the experiences of woman-identifying individuals due to limited word count. WomanACT recognizes that social identities, such as race, ethnicity, immigration status, disability, or sexuality, intersect with gender and lead to different experiences of the gender pay gap and gender pension gap. As a general pattern, Black, Indigenous, racialized, immigrant women and gender-diverse people, as well as individuals living with disabilities, will experience a larger gender pension gap exacerbated by systemic racism and ableism, which contributes to intergenerational poverty. An intersectional analysis of the gender pension gap can be found at Ontario Pay Equity Office: Gender Pension Gap | Pay Equity Office (gov.on.ca)

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[i] Pay Equity Office of Ontario. (2023). What is the Gender Pension Gap? Gender Pension Gap. https://payequity.gov.on.ca/gender-pension-gap/

[ii] Ibid.

[iii] Statistics Canada. (July 13, 2022). Private Retirement Income. Dictionary, Census of Population 2021. https://www12.statcan.gc.ca/census-recensement/2021/ref/dict/az/definition-eng.cfm?ID=pop194

[iv] Pay Equity Office of Ontario. (2023). Highlights. Gender Pension Gap. https://payequity.gov.on.ca/gender-pension-gap/

[v] Drolet, M. & Amini, M.M. (September 21, 2023). Intersectional perspective on the Canadian gender wage gap. Statistics Canada. https://www150.statcan.gc.ca/n1/pub/45-20-0002/452000022023002-eng.htm

[vi] The Prosperity Project. (2023). The Zero Report: 2023 Annual Report Card on Gender Diversity and Leadership. https://blog.canadianprosperityproject.ca/wp-content/uploads/2023/02/TPP_ARC_2023_EN.pdf 

[vii] Ibid.

[viii] Macdonald, D. (February 28, 2024). How the public sector is fighting income inequality (and why it’s still not enough). The Monitor. https://monitormag.ca/reports/how-the-public-sector-is-fighting-income-inequality-and-why-its-still-not-enough/

[ix] Statistics Canada. (June 23, 2023). Pension plans in Canada, as of January 1, 2022. Statistics Canada. https://www150.statcan.gc.ca/n1/daily-quotidien/230623/dq230623b-eng.htm

[x] Shilton, E. (2013). Gender Risk and Employment Pension Plans in Canada. Canadian Labour & Employment Law Journal, 101-141. https://ssrn.com/abstract=2302820

[xi] Ibid.

[xii] Ibid.

[xiii] Financial Services Regulatory Authority of Ontario. (n.d.). Events that may affect your pension. https://www.fsrao.ca/consumers/pensions/events-may-affect-your-pension

[xiv] Macdonald, D. (February 28, 2024). How the public sector is fighting income inequality (and why it’s still not enough). The Monitor. https://monitormag.ca/reports/how-the-public-sector-is-fighting-income-inequality-and-why-its-still-not-enough/

[xv] Ibid.

[xvi] Interval House. (2016). Barriers to Employability and Employment for Women Survivors of Intimate Partner Violence. https://intervalhouse.ca/wp-content/uploads/2018/05/Barriers-Report.pdf

[xvii] Ibid.

[xviii] Postmus, J. L., Plummer, S. B., McMahon, S., Murshid, N. S., & Kim, M. S. (2012). Understanding economic abuse in the lives of survivors. Journal of interpersonal violence, 27(3), 411–430. https://doi.org/10.1177/0886260511421669

[xix] Iciaszczyk, N., Neuman, K., Brierley, A., MacDonald, BJ & Sinha, SK. (2023). Perspectives on Growing Older in Canada: The 2023 NIA Ageing in Canada Survey. National Institute on Ageing, Toronto Metropolitan University. https://www.niageing.ca/2023-annual-survey

[xx] Statistics Canada. (2020). Low-income status by age, gender, and year: Canada, provinces and territories, census metropolitan areas and census agglomerations with parts [data set]. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=9810010201&pickMembers%5B0%5D=1.1&pickMembers%5B1%5D=2.3&pickMembers%5B2%5D=3.1

[xxi] Queiser, S., Maddox, R., Wilson, B. & de Jesus-Bretschneider, A. (August 2020). Senior Poverty & Inequity: The Toronto Experience. Social Planning Toronto and Well Living House. https://www.socialplanningtoronto.org/senior_poverty_report