Salary increase budgets stay flat as freezes remain rare across Canadian organizations
Canadian organizations expect to raise salaries by an average of 3.1 percent in 2027, excluding salary freezes, matching what they granted in 2026.
Darcy Clark, senior principal, compensation, talent and culture at Normandin Beaudry, said in the firm's release that salary increases have trended back toward pre-pandemic levels since 2025.
The 2027 projections "indicate alignment with 2026 budgets" despite economic, trade and geopolitical uncertainty.
Actual 2026 increases came in above the 3.0 percent Normandin Beaudry projected in January 2026, landing at 3.1 percent once salary freezes are excluded.
Salary freezes stayed uncommon through 2026.
Normandin Beaudry reports that 1.7 percent of respondents froze salaries last year, below the 2.3 percent the firm forecast in September 2025, while 3.6 percent of respondents project a freeze for 2027.
Canada has entered a technical recession after two consecutive quarters of economic contraction, according to the firm's survey analysis, which frames salary planning as a retention and workforce-strength question for the coming cycle.
Ownership structure produced little separation in the 2027 projections.
Privately held organizations that are not listed on the stock market project 3.2 percent, publicly traded organizations 3.1 percent, not-for-profits 3.0 percent, and government or Crown corporations 2.9 percent, the survey shows.
Normandin Beaudry's release puts six sectors above the average for 2027.
- 3.4 percent, telecommunications, data processing, data warehousing and related services, and finance and insurance
- 3.3 percent, real estate, rental and leasing, technology, and construction
- 3.2 percent, professional, scientific and technological service
The survey results put construction of buildings on top for 2026 granted increases at 3.6 percent.
- Professional, scientific and technological services, 3.5 percent
- Telecommunications, data processing, data warehousing and related services, 3.5 percent
- Finance and insurance, 3.4 percent
- Real estate, rental and leasing, 3.4 percent
Roughly 46 percent of responding organizations allocated an average additional budget of 0.9 percent in 2026 on top of their general salary increase budget, Normandin Beaudry reports, and the same share plans to secure the same 0.9 percent average for 2027.
Market adjustments to salaries drew the additional dollars at 67 percent, as per the survey, ahead of six other uses.
- Differentiating compensation for high performers, 55 percent
- Retaining employees in strategic or critical roles, 50 percent
- Accelerating progression for employees lower in their pay range, 40 percent
- Addressing compression and internal equity, 34 percent
- Retaining employees flagged as a retention risk, 32 percent
- Off-cycle salary increases, 24 percent
Counting those additional budgets, average total salary increases for 2027 are expected to reach 3.3 percent.
Salary structure increases for non-unionized employees averaged 2.7 percent in 2026 excluding structure freezes, and 2.2 percent when those organizations are included.
The 2.7 percent figure holds level with 2025 and sits above the 2.6 percent recorded in 2024.
Projections for 2027 put average salary structure increases at 2.5 percent excluding freezes, which the firm attributes to a focus on affordability and preserving cost structures.
Most provincial projections for 2027 are aligned with or below the national average of 3.1 percent.
That pojection comes from the 16th edition of Normandin Beaudry's Salary Increase survey, which drew responses from more than 800 organizations across Canada this summer.
