How companies project 2026 salaries 

Canadian employers are planning modest average salary increases in 2026, continuing a multi-year trend of tightening pay budgets

According to a late-2025 survey of nearly 400 organizations from Normandin Beaudry’s Salary Increase Pulse Survey of Canadian organizations conducted in the final quarter of 2025, Employers are now projecting average raises of 3.0% for 2026, which is down slightly from last summer’s forecast and extending a decline that began in 2023.

Results indicated that nearly two-thirds of participating organizations are not planning any changes to their initial salary increase budget projections from last summer. Of the 26% that are adjusting their budgets, more than half intend to decrease them. In addition to base salary budgets, 42% of respondents have allocated an average 0.8% of payroll for additional budget funds.

“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 of 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.”

Organizations also signalled a shift in internal priorities. Respondents highlighted employee engagement, legislative compliance (including pay equity and transparency) and employee communication as key focus areas in 2026.

On workforce planning, nearly half of employers expect their annual incentive plans to pay at or above target next year. About 35% of organizations said they plan to increase headcount in 2026.

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