By Julie Cafley and Zahid Salman
Canadian business leaders like to believe we operate in meritocracies. We assume the best ideas rise, hard work is rewarded, and talent naturally finds its way to the top.
But meritocracy only works when the conditions for fairness exist. In many organizations, those conditions do not. Unconscious and systemic biases distort decision-making, rewarding familiarity instead of performance and narrowing opportunity instead of broadening it.
This is more than a social issue. It is an economic one. Canada is facing a productivity crisis, lagging behind peer nations in growth and innovation. When talent is underutilized or excluded, productivity suffers. Deloitte estimates that youth unemployment alone could cost Canada $18.5 billion in GDP by 2034 if under-employment trends persist. Other groups face similar barriers: women, racialized communities, newcomers, older workers, and people with disabilities often struggle to access the same pathways to advancement as their peers. The result is a smaller talent pool, a weaker innovation pipeline, and diminished competitiveness.
The data is unambiguous. According to McKinsey’s most recent report, companies in the top quartile for gender or ethnic diversity on their executive teams are 39 percent more likely to financially outperform those in the bottom quartile. This is the strongest business case McKinsey has recorded since it began tracking performance outcomes a decade ago. Catalyst research reinforces this: employees who feel included are 42 percent more likely to be innovative and 43 percent more likely to go above and beyond their formal job responsibilities. When leaders widen access to opportunity, performance rises.
Critics sometimes argue that equity initiatives compromise quality. The evidence shows the opposite. Equity acknowledges that individuals do not begin from the same starting line; it works to remove barriers that obscure true performance. When bias is left unchallenged, “merit” becomes a reflection of past privilege. When bias recedes, excellence becomes visible.
The transformation of North American orchestras is one of the clearest illustrations of this principle. In the 1970s, women made up just five percent of musicians in top orchestras, despite equal proficiency. Affinity bias was obvious: male-dominated juries hired those who looked like them. Blind auditions changed everything. When performers played behind screens, the share of women hired rose dramatically. Today, women represent more than 40 percent of musicians in leading orchestras. The lesson is unmistakable: when systems focus on performance rather than perception, merit emerges.
Forward-thinking employers across Canada are applying similar lessons. Many have broadened recruitment pipelines to reach talent historically overlooked. Organizations such as Specialisterne support employers in hiring neurodivergent workers whose skills are undervalued in traditional assessments. Others are adapting their workplaces to meet the needs of diverse employees, recognizing that inclusion is foundational to unlocking productivity.
Health and well-being are emerging as essential components of workforce participation. According to research from GreenShield, one in three Canadians would leave their current job for more comprehensive mental health benefits, a trend led by younger generations and equity-deserving groups. Culturally relevant mental and physical health supports, trauma-informed care, and benefits that reflect the diverse needs of employees help ensure more Canadians can participate fully in work and contribute to the economy. Community-based partnerships serving Black, Indigenous, newcomer, and low-income populations demonstrate that when people have access to care that meets their lived realities, workforce participation and productivity rise.
Beyond workplaces, expanding access to essential services such as oral health, mental health supports, and necessary medications reduces the socioeconomic barriers that keep qualified people from entering or staying in the labour market. Healthy populations are more employable, more engaged, and more innovative. Investing in equity is therefore not a charitable act; it is a strategic economic imperative.
Achieving true meritocracy requires more than belief in fairness. It demands the intentional design of systems that reduce bias and widen access to opportunity. Blind auditions worked because they rewired how talent was assessed. Inclusive hiring, culturally responsive care, equitable access to essential services, and holistic employee supports serve the same purpose: they strip away noise so true ability can be seen.
Canadian leaders now face a defining choice. We can cling to the comfortable myth of meritocracy and watch our talent pool shrink along with our productivity. Or we can build the conditions under which merit can genuinely flourish.
Meritocracy isn’t broken. It is biased. And fixing it is not only a moral imperative, it is one of the smartest and most forward-looking investments Canadian organizations can make.
Julie Cafley is Executive Director, Catalyst Canada. Zahid Salman is President and CEO, GreenShield and member of the Catalyst Canada Advisory Board
