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Ontario’s new Transparency Bill is based on a legal falsehood

Ontario’s new Transparency Bill is based on a legal falsehood

As the most indebted non-national government anywhere, Ontario cannot afford this $50M boondoggle

By Howard Levitt

Original Source: National Post

The Wynne government’s new Transparency Bill is a $50-million act of “virtue signalling” by a government in its death throes, thrashing about in the hope of trolling for votes. This bill would require all advertised job postings to include a salary rate or range, bar employers from asking about past compensation and prohibit reprisal against employees who discuss or disclose compensation.

It also requires large employers to track and report compensation gaps based on gender and other diversity characteristics, and disclose the information to the province. All for the projected (and we know how seldom governments stick to their initial budgets) cost of $50 million.

As the already most indebted non-national government in the world, Ontario cannot afford this wasteful boondoggle.

The entire Act is premised upon a legal falsehood. Women who are paid less than men for the same work, even in part because of gender, are already fully protected by the Human Rights Code and the Ontario Employment Standards Act equal pay provisions. And there is no serious commentator who will suggest that either legislation is toothless. And existing legislation not only protects individual women. The Pay Equity Act also protects female-dominated job categories from receiving lower pay.

The goal is to make employers pay women salaries higher than their competitors in other provinces, across the border and around the world

What this new legislation represents is the commoditization of labour based upon identity politics.

It is based upon two notions, one, that Ontario is an island that can set wages divorced from the rest of the world; and two, that women should have wages set in isolation from their actual market value.

Neither is the case. We need only look at January 2018 for proof. It had the largest drop in employment in Ontario in more than 20 years, largely because of the Wynne government’s labour legislation. At the same time, job numbers boomed in almost all U.S. states. While the U.S. was providing tax cuts to their employers, many of which responded with large employee bonuses, Ontario passed legislation forcing uncompetitive market rates. And while the U.S. government was rapidly deregulating, Ontario passed one new burdensome regulation after another.

The goal is to make employers pay women salaries higher than their competitors in other provinces, across the border and around the world. Given that our productivity numbers and standard of living have been in relative decline for years, this would hasten that fall.

The bill is based on the socialist principle that there are no individual differences in merit or accomplishment and that remuneration should be solely a function of your position. In announcing it, the Wynne government announced that it is introduced to rectify the gender wage gap.

But what are the reasons for that gap? They are essentially three fold:

 Women leave the workforce for long periods of time to bear and raise children. During that time away, inherently, they lose market position and their skills atrophy relative to those that remain employed. As a practical matter, having been away from the workplace for years, their market value is indeed diminished. There is already a legislative answer to this and it is not in providing them with non-market wages. Women are compensated for this by receiving half of the estate from their spouses who had the advantage of their partners staying home to raise their children. And this relative disparity only applies to women who stay home longer than the prescribed maternity leave. Those who return immediately after their maternity leave are entitled to their former wages by employment standards legislation.

 Women work disproportionately in part-time positions relative to men. Part-time employees inherently command lower salaries because they are of less value to employers than employees who build up greater experience through full-time work and are more available. However, the Wynne government has just also passed legislation requiring employers to pay part-time employees the same wages as their full-time counterparts, further strangling Ontario’s competitive position.

 Women disproportionately choose jobs that pay less than jobs that men select. However, these jobs are not only paid less in Ontario but everywhere, including such relative havens of gender equity as Sweden and Norway.

Should Ontario employers be forced to pay administrative assistants and social workers the same amount it pays engineers and scientists? That is what it would take to redress gender inequity.

Another aspect of this bill, requiring the disclosure of salaries and permitting employees to discuss and disclose their salaries, even if they have a confidentiality provision in their employment contract, is to violate employee privacy rights, breed resentment and damage the morale of every employee paid less. Would not many Ontarians react adversely to their wages becoming public information. It is certainly not what they signed up for in accepting private-sector employment. Many companies would be badly damaged if all of their wages were open to their competition. There is no good reason why they should not be permitted to keep such information confidential.

The new inability of employers to ask employees about their existing salaries when they apply for work makes this Transparency Bill anything but. The more information both employers and employees have about the other, the better the labour market works. This provision further hamstrings employers in their negotiations. It is as if every Ontarian was suddenly unionized, not coincidentally one of the aims of this government. The transparency in this legislation, unhappily, only goes one way.

The most worrisome feature of this bill might be what the government has in mind for employers in requiring the new disclosure that this bill mandates. What I have described might be a meek harbinger of what is to come.

I have paid close attention to the Tory leadership race. No candidate has announced serious changes to increase our productivity, which, combined with cutting wasteful taxes and reducing regulatory impediments, is what Ontario requires. This bill takes us further in the other direction.

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