'It's virtue signaling': DEI has captured corporate Canada, think tank says

Diversity, equity and inclusion (DEI) is widespread in corporate Canada but merit-based hiring still largely rules, a report by the Aristotle Foundation for Public Policy says.

The foundation released its first Corporate Discrimination Index on Wednesday. It scored 25 of the largest Canadian-owned companies on the Toronto Stock Exchange on their hiring practices and on how often DEI language appears in their corporate reports, drawing on 500 job postings and a 42-term “woke lexicon” in annual and ESG reports.

David Hunt, the foundation’s research director, said DEI began with good intentions but became “an ideology that has gone much too far.” He said it now “prefers equality of outcomes” over equality of opportunity.

The foundation found that 96 per cent of the companies provide DEI training, 88 per cent declare demographic hiring or promotion targets and 80 per cent promote DEI in job postings. It also said 88 per cent fund what it described as ideological or political groups. Hunt said he did not want to “pass judgment” on the funding but that a bank “should be a neutral actor.” Whether that kind of involvement is “appropriate,” he said, is “a question that we need to ask.”

The same report found that explicit discrimination is rare. Only two of 500 postings examined restricted candidates by identity, both at Enbridge. Postings that gave preference by identity made up under five per cent, and 20 of those came from a single insurer, Intact Financial. Discriminatory hiring practices “appear rare on the surface,” the report says, and companies largely preserve merit-based hiring. Leigh Revers, the report’s lead author, said companies talk about DEI more than they practise it. “It’s very much purely words and no actions,” he said. “They can talk all they like, but do they actually deliver on things? And the answer is no, not really. So they’re not really being especially discriminatory when it comes down to it.”

On the foundation’s Corporate Discrimination Index, Intact ranks first, with a score of 67 out of 100, while Shopify scores zero. The index assigns 60 per cent of its weight to preferential and restrictive hiring, with preference found in under five per cent of postings and restriction in two of 500. Intact’s score rests largely on postings that encourage applications from “equity-deserving groups,” language that is legal and not exclusionary. Hunt said Shopify scored zero because it “exclusively hires based on merit.” He said other sectors should look to high-growth technology firms. “Tech stands out in a good way,” he said.

A separate language index counts how often DEI terms appear in corporate documents. Hunt said the foundation built it because explicit bias rarely surfaces in job postings. “But that does not mean that discrimination and preferential hiring is not happening,” he said. “Because the fact that almost everyone has to go through this DEI training, and we see that that DEI is completely ubiquitous throughout corporate Canada. It’s extremely unlikely that that’s not affecting decision making in the job hiring process.” The foundation ran the word searches through the artificial intelligence chatbots ChatGPT and Grok, and quoted ChatGPT assessing its own results. The results were also later confirmed by researchers. The report said companies mention “Indigenous” nearly as often as they mention their products.

The report’s broader claim is that sectors using more ideological language discriminate more in hiring. It rests on a six-sector comparison the authors say is “driven largely by the low scores of a single sector group,” technology, and the report says that finding should be “treated with caution given the small sample.” Asked whether DEI explains why Canadians struggle to find work, Hunt said he would be “very careful” not to confuse correlation with causation. There was “a whole menu of factors,” he said. “I wouldn’t want to overstate how important this is.”

The foundation calls this a “DEI Paradox.” It says companies promote DEI publicly while keeping hiring largely merit-based, and that heavy use of such language signals a workplace culture prone to discrimination. Revers said that what DEI “really means is setting quotas,” and that setting demographic targets in advance means “you’re kind of prejudging the candidate pool.” “But what you’re really doing is preemptively setting the playing field,” he said. “That’s what we consider to be discrimination.” The report found few postings that actually screen candidates by identity.

Revers said the company declarations are not matched by action. “It’s just saying one thing and doing another. So corporations are particularly good at that. It’s very much window dressing. It’s virtue signaling,” he said. They do it, he said, “because they know that it’s good for reputation if they say these things.”

“Canadian firms are heavily engaged in social engineering,” Revers said in a statement. The practice “extends well beyond the office,” he said, and companies fund groups that “advocate controversial issues.”

In an interview, Revers said corporations “were sold down the river on this” by “the academics in the universities.” Some companies are already retreating, he said. DEI is “kind of in hiding now,” and “the word has been toxified.” Even so, he said, “Canada’s not crazy.”

Revers is a University of Toronto professor emeritus who writes opinion columns for the National Post.

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