As the cost-of-living continues to soar in Canada, workers may be wondering what kind of salary increase they could be getting this year.
Actuarial consulting company Normandin Beaudry revealed the findings of its Salary Increase Pulse Survey on Wednesday. Nearly 400 Canadian companies participated in the survey during the last quarter of 2025.
Unfortunately for employees, the findings show that Canadian organizations are expected to continue slightly scaling back their salary increase budgets.
The report projects an average salary increase of three per cent in 2026, excluding raise freezes. This is a further decrease of 0.1 per cent compared to the results from summer 2025.
According to the report, this aligns with the steady decline observed since 2023.
Change in average salary (CNW Group/Normandin Beaudry)
The report broke down the average salary increase by province. Employees in Quebec are forecast to receive the highest raises in Canada at 3.5 per cent, followed by Ontario (3.3 per cent), Alberta (3.3 per cent), and B.C. (3.2 per cent).
“As economic and trade uncertainty continues to shape Canada’s market, organizations are taking a cautious, gradual approach to salary increase budgets,” said Darcy Clark, senior principal, compensation at Normandin Beaudry.
“At the same time, heightened expectations for transparency are pushing organizations to refine and clearly articulate the holistic employee experience and total rewards they offer.”
Normandin Beaudry found that nearly three-quarters of organizations (74 per cent) are not planning any changes to their initial salary increase budget projections from last summer.
Of the 26 per cent of participating employers planning adjustments to their initial budget, more than half will be making a reduction, and the rest are intending to increase their initial budget.
Zamrznuti tonovi/Shutterstock
In addition to the traditional salary increase budget, 42 per cent of respondents have allocated an average of 0.8 per cent of payroll for additional budget funds.
The report found that employers are also focusing internally on their rewards strategies for employees in 2026.
Strategies they’re focusing on include:
Employee engagement: 58 per cent
Compliance with legislative requirements (pay equity and transparency): 47 per cent
Employee communication: 42 per cent
Normandin Beaudry said that almost half of organizations (47 per cent) expect their annual incentive plan to pay at or above target, and 35 per cent of organizations plan on increasing their workforce in 2026.
Check out the full report.