Most Canadian women still retire with 17% less: report

For every retirement dollar a Canadian man receives, a woman still gets only about 83 cents – and that ratio has barely budged since the mid‑1970s. 

In a research paper, Understanding the Gender Pension Gap in Canada, Elizabeth Shilton notes that the “gender pension gap” persists even though Canada’s three‑pillar retirement income system has raised average retirement incomes and earned strong international marks for adequacy, sustainability and integrity.

Women have entered the paid labour force in large numbers and increased their earnings, yet they retire with materially less income than men. 

The Gap in One Sentence 

The gender pension gap in Canada is the percentage difference between average retirement income of women and men aged 65+, based on combined income from: 

• Old Age Security/Guaranteed Income Supplement (OAS/GIS) 
• Canada Pension Plan/Quebec Pension Plan (CPP/QPP) 
• Private pensions, including workplace plans and RRSP/RRIF income 

In 1976, the first year with meaningful data, the gap was about 15 percent.  

Today it’s roughly 17 percent. In other words, the system has never delivered equal pensions. 

Why It Matters for Plan and Policy Design 

Behind that 17 percent gap sits a much starker reality: older women are poorer.  

In 2020, about 200,000 more women than men aged 65+ lived below Canada’s low‑income cut‑off.  

Among those 75 and over, 21 percent of women fell below that cut‑off, compared with 13.9 percent of men. 

This is not just a social issue. It raises questions about: 

• Whether current plan designs and tax‑assisted savings vehicles entrench unequal outcomes 
• How far public plans can and should compensate for gendered labour market patterns 
• The long‑term sustainability of relying heavily on voluntary private savings 

The Three Pillars – and Where the Damage Is Done 

Canada’s retirement income system follows the standard three‑pillar model: 

1. Pillar 1 (OAS/GIS): poverty relief, flat‑rate, tax‑funded 
2. Pillar 2 (CPP/QPP): mandatory, contributory, earnings‑related public pensions 
3. Pillar 3 (private pensions): workplace plans and personal RRSP/RRIF savings 

Each pillar has a different gender profile. 

Pillar 1: The only pillar where women come out ahead 

OAS pays the same flat benefit to all who qualify, with a clawback at higher incomes. GIS tops up low‑income seniors. 

This pillar is formally gender‑neutral, but women receive slightly more because they are more likely to qualify for GIS and less likely to be hit by the OAS clawback.  

It narrows the overall gap, but as a basic poverty‑relief pillar it cannot carry the full load of income replacement. 

Pillar 2: CPP/QPP – structured help, not a fix 

CPP/QPP contributions track “pensionable earnings” between $3,500 and the YMPE. Benefits aim to replace a fixed share of those earnings over a working life, with early and delayed retirement options. 

Several features explicitly blunt the impact of gendered careers: 

• Mandatory coverage, including part‑time, casual and self‑employment income 
• Immediate vesting and portability across jobs and provinces 
• “Low income drop‑out” years and a “child‑rearing drop‑out” for periods with young children 
• Survivor benefits and credit‑splitting on relationship breakdown 
• Price indexation and life‑long payments 

Even so, the CPP/QPP gender pension gap still sits in the mid‑teens.  

On retirement pensions alone, the gap is closer to 30 percent; survivor benefits pull it down.  

The Canada Pension Plan Enhancement will gradually raise replacement rates and the covered earnings ceiling, which should modestly reduce the overall gap once fully phased in. 

Pillar 3: Private pensions – biggest and most unequal 

The most important structural shift is here. Between 1976 and 2021: 

• OAS/GIS stayed roughly flat in real terms 
• CPP/QPP roughly doubled 
• Private pensions almost doubled and now provide about 57 percent of all retirement income for Canadians 65+ 

For women, private pensions now supply around half of total retirement income and twice as much as Pillar 1. This matters, because: 

• The gender pension gap in private pensions is about 25 percent 
• That is the highest gap of the three pillars 
• As Pillar 3 grows, the system leans harder on its least equal component 

Within Pillar 3: 

• DB workplace plans remain the “gold standard,” pooling investment and longevity risk, but coverage has fallen and is concentrated in the public sector, where women are over‑represented but not dominant. 
• Private‑sector coverage has eroded and shifted toward DC and group RRSP designs that place investment and longevity risk on individuals. 
• Plan rules historically engineered around uninterrupted “male pattern” full‑time careers have left many current female retirees with thinner accruals, even though vesting rules have since improved. 

Personal RRSP/RRIF savings reflect and reinforce gender gaps: 

• Contribution room rises with earnings; women earn less and generate less room 
• Higher‑income, mostly male contributors get the most valuable tax deductions 
• RRSP/RRIFs do not pool longevity risk; women must either buy annuities or stretch smaller balances over longer lives 
• Retail annuities purchased with RRSP/RRIF funds can use sex‑based mortality tables, so women pay more or receive less for the same capital 

Private pensions are where the “rising tide” has been strongest – and where women are furthest behind. 

The Real Drivers: Earnings and Time 

Because CPP/QPP and private pensions are built to convert earnings and years in paid work into retirement income, two labour market realities keep the gender pension gap in place: 

• The gender earnings gap: women still earn less over a year than men 
• The gender labour force engagement gap: women still spend fewer years and hours in paid work 

The hourly gender wage gap has narrowed sharply. The annual gender pay gap has narrowed more slowly and remains much larger, because it bakes in: 

• More time out of the labour force for women 
• More part‑time and reduced‑hours work to accommodate family care 
• The long‑lasting “motherhood wage penalty” on women’s earnings trajectories 

Put simply: you can equalize hourly pay and still leave a big pension gap if women continue to do more unpaid family care and spend less time in paid work across their lifetimes. 

What That Implies for the Industry 

For a benefits and pensions audience, the key takeaways are: 

• The gender pension gap is not just a by‑product of “old attitudes”; it is the logical outcome of a system that rewards uninterrupted, higher‑paid work in a labour market where women still carry most unpaid care. 
• Pillar 3 now does the heaviest lifting in Canada’s retirement income system while also generating the largest gender gap. 
• Design choices inside plans – especially around coverage, vesting, portability, survivor benefits, buy‑back rules, decumulation options and annuity pricing – either lighten or deepen that gap. 

You don’t need every historical detail to see the core issue: as long as private, voluntary, earnings‑linked arrangements dominate retirement income, and women’s paid work remains shorter, more interrupted and lower paid, the gender pension gap will not close on its own.