Federal budget 2018 aims to increase workforce participation of women

Waist up portrait of Justin Trudeau, Prime Minister of Canada, at the United Nations headquarters in New York City, New York, September 21, 2017. EuropaNewswire/Gado/Getty Images

One of the predominant themes of next week’s federal budget will be increasing the workforce participation of women – and recently released internal documents point to big economic benefits for Canada if it can help more women enter the job market.

The Liberal government has said improving the economic success of women and promoting gender equality will be among the primary objectives of next Tuesday’s budget.

READ MORE: Trudeau is talking paternity leave: Will it be in the 2018 budget?

Options on the budgetary table include narrowing the pay equity gap, ensuring more gender equality in boardrooms, easing access to capital for female entrepreneurs and opening up more funding opportunities for female scientific researchers.

These types of commitments could feed into Ottawa’s efforts to hit another overarching target for this government: raising the needle on long-term growth.

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A briefing note prepared for Finance Minister Bill Morneau estimates that closing the labour-market participation gap between women and men by half over 15 years would raise the country’s potential long-term economic growth by an average of 0.25 percentage points per year over that period.

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Trudeau government prepares to table federal budget – Feb 21, 2018

If nothing changes, the memo to Morneau estimates potential growth will “remain low” over the next 15 years at 1.7 per cent.

But the analysis says raising the workforce participation rate of women by 4.5 percentage points by 2032 would lift Canada’s potential growth to about 1.9 per cent.

With the intensifying negatives from Canada’s aging workforce, growth isn’t expected to pick up its pace without help. The briefing note, obtained by The Canadian Press under the Access to Information Act, said the rapid pace of growth in 2017 is “not sustainable,” particularly as temporary economic factors fade and interest rates continue to rise.

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The document lists higher female labour-market participation among four broad policy goals that will boost potential economic growth.

One of the others calls for raising immigration levels of skilled workers by 15,000 each year as a way to increase annual growth by 0.1 percentage points. Another is upping the participation rate of workers aged 55 to 64 years old – in line with those in top-performing countries – for an annual growth injection of 0.2 percentage points.

READ MORE: Canada won’t be ‘impulsive’ in countering U.S. corporate tax cuts, Morneau says

The fourth policy option in the document is redacted.

Next week, the Liberal government will table the first federal budget to scrutinize all its commitments through a gender-equality microscope.

The Canadian Press obtained another briefing note that revealed the “proposed gender-equality framework” presented to Morneau last August.

A senior government official, who spoke on condition of anonymity because the budget details have yet to be made public, said the memo was an early version of the pillars examined for the budget. They noted, however, the gender-budgeting road map has evolved since that time, following consultations with experts.

The document contained a detailed exploration of the gender gap in labour-force participation and underlined the importance of creating conditions to help more women enter the job market.

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Celebrating gender diversity in the workplace – Feb 5, 2018

It said the gender workforce divide narrowed considerably over the last few decades – from nearly 39 percentage points in the late 1970s to nine in recent years.

However, the memo said the improvements have plateaued and are largely unchanged since the early 2000s, despite rising educational levels among women.

“Higher representation of women in the labour force has led to higher incomes for Canadian families and, in turn, real economic gains,” said the note, also obtained under the Access to Information Act.

The document noted that Canadian women with children are less involved in the labour market than those in many industrialized countries and identified them as a group with potential to further raise their work-force participation.

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Several stakeholders who participated in the government’s gender-related consultations last year are hoping the budget will contain measures such as dedicated leave for new fathers or non-birthing parents, cash for the Liberals’ promised pay-equity legislation and, possibly, something more on child care.

There are expectations the budget could contain many commitments aimed at helping women – from trade missions designed for female entrepreneurs, to mentorships aimed at women, to setting aside a significant share of public contracts for women-led businesses.

Prime Minister Justin Trudeau used his keynote speech at the World Economic Forum in Davos, Switzerland last month to say Ottawa will proceed this year with legislation to ensure equal pay for work of equal value in federal jobs as a “first step” towards getting more women into the workforce. He also said it’s time for serious looks at parental leave and child-care policies.

Trudeau cited estimates by global consulting firm McKinsey and Company that narrowing the gender gap in Canada could add $150 billion to its economy by 2026.

Last month, Ottawa also announced the winners of a $50-million program designed to teach digital and coding skills to more than one million kids – with a special emphasis on encouraging underrepresented groups like girls to get involved.

The president and CEO of Actua, an organization that received $10 million of that amount, said creating more opportunities for women to join the workforce, particularly in rapidly expanding innovative industries, makes “huge economic sense.”

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“We’ll be facing even more workforce shortages in the future in these fields,” said Jennifer Flanagan. “We can’t afford to leave out half our population from the opportunity to fill in those workforce gaps.”

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