Ottawa launches $33-million corporate-diversity effort

Innovation Minister Navdeep Bains at the cabinet retreat in Ottawa in September 2020.
Innovation Minister Navdeep Bains at the cabinet retreat in Ottawa in September 2020. The Canadian Press/Sean Kilpatrick

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On Thursday, Innovation Minister Navdeep Bains officially launched Ottawa’s new opt-in corporate-diversity initiative. The federal government has promised to spend $33 million to fund business associations and investor groups’ work on digital resources  companies can use in their efforts to improve representation and inclusivity, as well as support programs for small- and medium-sized firms and incentives for companies that meet its goals. Here’s what you need to know:

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The goal: Participating private-sector organizations—including businesses big and small, non-profits and post-secondary institutions—will agree to aim to have people of colour, Indigenous people, people living with disabilities and LGBTQ2 people in 30 per cent of board and senior-management positions, as well as gender parity. 

The incentive: The Standards Council of Canada, a federal Crown corp, will develop criteria to measure firms’ representation and diversity practices. “Companies that achieve this 50-30 target would be better positioned to access … grants and contributions and services within ISED,” Bains told The Logic in an interview Thursday. Last month’s Fall Economic Statement also promised the government would buy more from Black-owned and -operated businesses. “It’s leveraging our purchasing power to help with the economic recovery going forward to make sure it’s more inclusive,” said Bains. “We know that the economic fallout has disproportionately impacted women, racialized persons [and] Indigenous populations,” he said. 

The showcase: More than 500 organizations have signed up so far, including innovation-economy firms like Clearpath Robotics, Sequence Bio and Wattpad. Bains said he wants to “lead by example.” Among his own senior political staff, “we have achieved that 50-30 target.” In December 2019, The Globe and Mail reported that only 14 of the then-37 chiefs of staff to federal cabinet ministers were women, and only four were racialized people; the Prime Minister’s Office refused to provide comprehensive demographic data on the Liberals’ political staff.

The backstory: In May 2018, Parliament passed legislation requiring many publicly traded firms to tell shareholders how many of their directors and top executives come from underrepresented groups. They must also disclose any targets they’ve set to change those numbers, policies to achieve the goals, and whether representation is a factor when filling board and senior-management roles. The setup is colloquially called “comply or explain,” since firms that don’t do all of the above are required to tell their shareholders why. The rules took effect in January. Canada is “the only jurisdiction in the world to go beyond gender and look at diversity through the lens of the Employment Equity Act,” which applies to those other marginalized groups, Bains said.

And yet: At firms that are likely subject to the new federal rules, people with disabilities hold six board seats, Indigenous people seven, and members of visible-minority communities 89 of 1,400-plus directorships, per law firm Osler’s October study. Only one each has targets to increase the numbers for those second and third groups; just 28.8 per cent of companies on the Toronto Stock Exchange have goals for women board members. Nine provinces and territories have had comply-or-explain rules in place since December 2014, but they haven’t proved particularly effective. The Ontario Securities Commission threatened to get tougher if firms didn’t improve their gender numbers by the end of 2017, but didn’t.