Navigating pay transparency in Canada: What employers and candidates need to know for 2026

As Canada moves toward greater pay transparency, 2026 marks a pivotal year for both employers and job seekers. With new legislation coming into effect, particularly in Ontario, organizations must prepare for a shift in how compensation is communicated, managed, and perceived. This blog outlines the key issues surrounding pay transparency, what candidates and employers should expect, and the proactive steps needed to navigate the changes effectively.

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Understanding the legislative shift

Several provinces have already implemented pay transparency laws, including British Columbia, Nova Scotia, Prince Edward Island, and Newfoundland & Labrador. These laws typically require employers to:

• Include salary ranges in job postings
• Ban questions about salary history
• Protect employees from retaliation for discussing pay

Ontario’s new legislation, effective January 1, 2026, introduces additional requirements:

• Employers with 25 or more employees must include salary ranges in publicly advertised job postings
• Salary ranges must not exceed $50,000 unless the role pays over $200,000
• Employers must disclose the use of artificial intelligence (AI) in hiring processes
• Interviewed candidates must be notified of outcomes within 45 days

These changes aim to promote fairness, reduce wage gaps, and empower candidates with clearer expectations.

5 key issues and challenges for employers

While the intent behind pay transparency is commendable, it presents several challenges for employers:

1. Internal pay discrepancies

Publishing salary ranges may expose inconsistencies between current employee compensation and new hire offers. Employers must be prepared to address concerns and, where necessary, adjust pay structures to ensure fairness and equity.

2. Manager and HR preparedness

Many managers are unfamiliar with compensation frameworks and may struggle to explain pay decisions. Training is essential to equip leaders with the tools to handle sensitive conversations confidently and consistently.

3. Compliance and operational complexity

Organizations must revise job posting templates, update employment contracts, and ensure internal policies align with new legal requirements. For companies operating across multiple provinces, navigating varying regulations adds another layer of complexity.

4. AI disclosure and ethical considerations

The requirement to disclose AI use in hiring raises questions about bias, fairness, and transparency. Employers must evaluate their recruitment technologies and ensure they meet ethical and legal standards.

5. Cultural resistance

Transparency represents a cultural shift. Organizations that have traditionally kept compensation private may face internal resistance. Change management strategies will be critical to foster trust and alignment.

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What candidates should know

For job seekers, pay transparency offers several advantages:

• Clarity and confidence: Knowing the salary range upfront helps candidates assess fit and negotiate effectively.
• Fairness: Transparency reduces the likelihood of wage discrimination based on gender, race, or other factors.
• Empowerment: Candidates can make more informed career decisions and advocate for equitable treatment.

However, candidates should also be aware that salary ranges may reflect broad bands, and final offers will depend on experience, skills, and internal equity.

5 steps employers should take now

To prepare for the 2026 changes, employers should consider the following actions:

1. Conduct a compensation audit
Review current pay structures to identify and address any inconsistencies or inequities.

2. Define and document salary ranges
Establish clear, defensible salary bands for each role and ensure they align with market data and internal equity.

3. Train managers and HR teams
Provide training on compensation philosophy, pay decisions, and how to communicate transparently with employees and candidates.

4. Update job postings and policies
Revise templates to include salary ranges and AI disclosures. Ensure employment contracts and internal policies reflect new legal requirements.

5. Develop a communication strategy
Proactively communicate changes to employees, emphasizing the organization’s commitment to fairness, transparency, and compliance.

Conclusion

Pay transparency is more than a legal obligation—it’s an opportunity to build trust, attract top talent, and promote equity in the workplace. By taking thoughtful, proactive steps, employers can turn compliance into a strategic advantage. For candidates, the new laws offer greater clarity and empowerment in navigating their careers.

As 2026 approaches, now is the time for organizations to assess, align, and act.