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Leave pay inequities behind in Canada’s net zero workforce

Future jobs in environment and clean technologies will likely reflect current pay inequities without a concerted effort from government and companies.

What’s new

In February, the federal government released the Sustainable Jobs Plan, outlining interim goals and actions between 2023 to 2025 to build a workforce ready for the net zero transition. One of the core outcomes of the plan is to advance Indigenous reconciliation, promote gender equality, and build a more diverse and inclusive Canada.

Achieving Canada’s climate targets will require a massive and highly-skilled workforce. To date, jobs related to environment and clean technologies (ECT)  in Canada have grown from 270,746 in 2012 to 340,870 in 2019, and employment in the sector is expected to continue to rise by an additional 400,000 jobs by 2050. While this workforce will carry forward many of the skills, knowledge, training, and experiences of those working in conventional energy industries today, pay inequities related to gender or racialized and underrepresented workers that are prevalent in these sectors should be left behind.

Progress so far

Currently, the best available data to track pay equity is from Statistics Canada, which provides a breakdown of annual income by gender and population groups for ECT sectors. However, there are major data challenges preventing more detailed analysis of pay equity. For instance, Statistics Canada data does not include information for all racialized groups or gender identities, and it only presents average wages, thereby obscuring differences across types of employment (e.g. full- or part-time) and positions held (e.g. entry level or executive). While the Sustainable Jobs Plan makes improving data quality a priority, it’s unclear whether it will include more disaggregated data for ECT sectors.

Figure 1 shows indexed annual wages across ECT sectors using available data. On average, women made $0.82 for every dollar earned by men in ECT sectors in 2019. Pay gaps widen even further for Indigenous workers — especially Indigenous women, who make $0.75 for every dollar earned by non-Indigenous men.

Figure 1: How pay gaps compare for women and Indigenous workers in ECT sectors.

Historical data shows that ECT sectors are trending in the right direction. Pay gaps between men and women in ECT have decreased compared to 2015 across the board, closing by $0.06 (from $0.76 in 2015 to $0.82 in 2019). These improvements are slightly faster than the overall economy, where women earned $0.69 for every dollar earned by men in 2015 and $0.73 in 2019. 

By contrast, traditional energy and resource extraction sectors see some of the largest pay disparities, with women earning weekly average wages as low as $0.60 in 2019 for every dollar earned by men under the same occupational categories. Deep systemic barriers are pervasive throughout conventional energy and resource extraction sectors, where women and under-represented groups face significant barriers to well-paying jobs and upward mobility. Without targeted government and corporate action, workforce transitions from conventional energy and resource extraction sectors into lower-carbon sectors may carry over existing structural barriers and inequities.

Policies and commitments can be a foundation to addressing inequalities

In addition to commitments made under the Sustainable Jobs Plan, a number of policies and programs have been implemented to reduce and prevent these barriers within ECT sectors. For example, programs such as the federal Capacity Building stream of the Smart Renewables and Electrification Pathways Program aim to provide funding to support mentoring, apprenticeships, and training for underrepresented groups in clean energy. Furthermore, while Budget 2023 linked the level of available tax credits to companies that meet certain labour conditions that include fair pay, benefits for workers, and employment of apprentices, bonuses could also be offered in clean investment tax credits for companies that adhere to pay equity criteria and have strong representation of equity-seeking groups in senior leadership positions. Alternatively, they could be withheld from firms with high levels of pay inequities and lack of pay parity.

Ultimately, Canada's workforce will not become more equitable unless governments and companies take strong and sustained action to make it so.

Arthur Zhang is a Research Associate with the Canadian Climate Institute.