Canadian small businesses are expecting to raise employee wages by 3.3 per cent over the next 12 months, according to a recent report.
The Canadian Federation of Independent Business (CFIB) Business Barometer reported high inflation and a tight job market are pushing companies to make the move.
“Wage plans would have to further moderate to bring inflation within the Bank of Canada’s target range of 1%-3%, however, they are really not that far off and, quite frankly, show a sensible approach in the current inflationary context. Small businesses, while responding with higher than usual wage increases, are not really the ones fueling the inflation fire at the moment,” said Simon Gaudreault, chief economist and vice president of research at CFIB.
The group noted that while wage increase plans are elevated compared to historical standards, the latest report shows numbers are down after peaking at 3.6 per cent in June of last year.
While the automotive aftermarket shows signs of strength and resiliency, the same can’t be said for other sectors.
The CFIB reported that more businesses reported their general situation as bad this month (20 per cent), while fewer reported it as good (34 per cent) compared to last month. The long-term small business confidence index in April crept up by less than half a point to 55.7. While that’s on an upward trend, it’s below its historical average of 61, indicating some way to go before economic perspectives are back to normal on Main Street.
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