Canadian employers should be starting to feel pressure with pay transparency regulations are in effect in several provinces and continuing to be passed across the country. Yet, despite these regulations, many organizations are still holding their cards close to their chests about pay program communication.
However, this might not be the best plan. Those companies that are tackling transparency head on are finding it takes significant time and effort to manage the transition.
How pay works is still largely a ‘mystery’ for employees, but not for long
Communicating pay program information is not yet a prevalent practice in Canada, although certain key pay program elements, such as job level, are being communicated by a majority of Canadian employers, according to our 2025 Pay Transparency Survey. Regardless of whether they are communicating about compensation or have been silent so far, employers globally, including Canadian employers, acknowledged that greater transparency would pose the same challenges (Figure 1).
It’s crunch time, and employers need to act
Canadian pay transparency rules are evolving, and most provinces already have passed legislation or are on the path toward doing so. Figure 2 reflects these changing legislative requirements by jurisdiction.
Legislation requirements
Figure 2. Pay transparency legislation by jurisdiction
- Federal and provincial pay equity laws require different reporting
- For organizations with 100 or more employees
- For organizations with 1,000 or more BC-based employees by Nov. 1, 2024, 300 or more employees by Nov. 1, 2025, and with 50 or more employees by Nov. 1, 2026
- In effect Jan. 1, 2026; applies to employers with 25 or more employees
| Jurisdiction |
Ban on asking salary history |
Requirement to share salary ranges in job postings |
No retaliation for employees asking about their personal pay information |
Reporting requirements 1 |
| Legislation currently in place |
| Federal |
|
|
|
✓ 2 |
| British Columbia |
✓ |
✓ |
✓ |
✓ 3 |
| Prince Edward Island |
✓ |
✓ |
✓ |
|
| Nova Scotia |
✓ |
✓ |
✓ |
✓ |
| Legislation passed but not yet in effect |
| Ontario 4 |
✓ |
✓ |
|
|
| Newfoundland and Labrador |
✓ |
|
✓ |
|
| Legislation tabled but not yet passed |
| Manitoba |
|
|
|
|
Key learnings from employers who are taking action
Among organizations that are tackling pay transparency head on, we have learned:
- The less an organization communicates today, the more concerned they are about pay transparency. An organization’s transparency strategy is correlated with its culture. Many are expecting the shift to have a significant impact on leaders and managers who need to champion and implement the changes.
- Most people managers do not fully understand how compensation works nor how it is managed. They are on the frontline and employees will go to them first with questions, so education is vital for this group.
- Organizations are more anxious about the reaction of current employees than the reaction of external candidates. While the regulations tend to focus on the external picture, the internal impact is going to take the most effort to manage.
- The more structure you have in place, the easier it is to communicate. Organized, consistent and governed pay programs make it easier to explain pay ranges and how compensation works.
- It may get messy at the mid-level in Ontario. Regulations often are not developed by pay experts and, therefore, are open to interpretation. This leaves employers with the challenging task of deciding what information they need to provide to balance regulatory requirements and attracting the right candidates.
Developing your pay transparency roadmap
Here are the steps we recommend to define your organization’s approach to pay transparency:
-
01
Know where you are today
This is an essential first step so that you can avoid issues when transparency regulations create visibility into your practices. Ask yourself:
- Do you have data and insights related to pay fairness / equity for your organization?
- Are there any problem areas that might be highlighted when transparency regulations are implemented?
- What is the perspective of key stakeholders about the desired amount of pay transparency?
-
02
Prepare your rewards data and analytics
This step is about more than just pay ranges. Start by making sure that your data is accurate and available where and when needed, across the organization. Segmentation is important. Assess the positioning of current employees in your salary structure today and build your understanding as to whether this positioning differs by location, function and level. Any anomalies in positioning in range should be explainable to managers and employees.
-
03
Get your compensation disclosure approach ready — identify your issues
Develop your pay disclosure approach. Know the minimum you need to do to comply, but also what you can do to own your pay transparency journey so that you control your organization’s narrative. Your approach should include which pay information you will share (internally and externally), who will have visibility to it, and when and what processes are needed to support it.
-
04
Prepare your stakeholders and communicate
Regardless of how good your strategy is, you need support from key stakeholders to change your culture around pay transparency. Without that support, your efforts will likely fail. Take the time to build stakeholders’ knowledge and confidence to talk about pay.
No matter where you are today, transparency will eventually be the norm for all organizations. With the right planning and education, your road to greater transparency can be a positive experience for you and your employees.
