Salary Increases for 2026 - What to Expect.

What are Canadian employers planning?

TAP - Canadian Salaries in 2026

Salaries are a big topic leading into 2026 given the ongoing economic climate and persistent trade uncertainties. Results indicate that organizations are continuing to scale back their salary increase budgets for 2026, according to new research from Normandin Beaudry.

Being proactive in managing salaries will be important this year, given the uncertain economic climate.

Many organizations across Canada are therefore planning carefully. Average salary increase budgets in Canada are forecasted at 3.1% for 2026 excluding salary freezes.

2025 increase budgets were set at 3.3% however actual increases leveled out at 3.2%, lower than expected. Inflation is projected to be 2% percent in 2026, down from initial projections of 2.5 % earlier in 2025. The labour market is continuing to favour employers.

The Normandin Beaudry study — which heard from more than 1,000 organizations across Canada — found that professional, scientific and technical services sectors are forecasting increases in 2026 at 3.6% on average, the highest sectors in the study, but down from 4.7% in 2025. All organizations of all ownership types however are under pressure. Minor variances across all company ownership types were observed for 2026 increase forecasts:

·         Private sector (not listed on the stock market): 3.2%

·         Not-for-profit organizations: 3.1%

·         Private sector (listed on the stock market): 3.2%

·         Public and parapublic sectors: 3.0%

Most provincial projections report 2026 increases lower than the national average of 3.1%, with British Columbia, Ontario, and Quebec projecting the highest increases. 

Please see the Normandin Beaudry study for additional details and more tables including those for planned additional budgets and total budgets.

WHAT ACTIONS SHOULD EMPLOYERS TAKE?

Employers should review the competitiveness of their salaries each year in relation to their local and regional marketplace, their sector, and what is happening in the general economy.

The new year is poised to be another challenging environment for jobseekers as a quarter of hiring managers surveyed say they are “cautious” about their ability to hire more workers in 2026, according to newly released data, according to a recent article in an article from Global News and results from a Harris Poll Survey.

What turnover is your business experiencing? Are employees asking or suggesting that rates of pay should be reviewed? Are potential new hires not accepting or are negotiating offers?

These are all signs that your market competitiveness may not be aligned, or that employees are expecting the organization to adjust their paycheck.

In the end it will come down to what the business can afford, both financially and in keeping and attracting talent. Having insight and data however will go a long way to support decision-making that is right for both the organization and it's employees.

Our team at TAP Strategy & HR Consulting are experts in this area and can help you navigate these decisions. TAP has access to benchmark market data for all regions across Canada and can help make the best use of your compensation budgets. Give us a call at 613-222-2499.

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Bruce Weippert is the co-founder and president of TAP Strategy & HR Consulting, a boutique-style management consulting firm specializing in strategy, HR services and Helping Businesses Succeed.