Canadians can expect about a 3% salary increase in 2026
Normandin Beaudry’s survey of nearly 400 firms projects a 3% average pay increase in 2026, with provincial gaps and employers prioritizing rewards and compliance.
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By Torontoer Staff
Actuarial firm Normandin Beaudry’s Salary Increase Pulse Survey, based on responses from nearly 400 Canadian organisations collected in late 2025, projects an average salary increase of 3.0 per cent for 2026, excluding raise freezes. That figure is 0.1 percentage point lower than the firm’s summer 2025 projection and continues a gradual decline observed since 2023.
Most employers plan little change to previously announced budgets, though some intend to adjust allocations and a portion of companies have set aside additional payroll funds to address specific needs.
What the numbers show
The 3.0 per cent average is a survey-wide projection that excludes organisations imposing salary freezes. Normandin Beaudry reports that 74 per cent of respondents do not plan to change the salary increase budgets they announced last summer. Of the 26 per cent considering adjustments, a majority are planning reductions rather than increases.
In addition to base salary budgets, 42 per cent of respondents have set aside extra funds, averaging 0.8 per cent of payroll, to manage special pay needs or top-ups outside the standard increase process.
Provincial differences
- Quebec: 3.5 per cent, the highest provincial average
- Ontario: 3.3 per cent
- Alberta: 3.3 per cent
- British Columbia: 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. 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.
Darcy Clark, senior principal, compensation, Normandin Beaudry
Where employers are focusing rewards efforts
Beyond base pay, employers told Normandin Beaudry they will emphasise internal rewards strategies in 2026. The top priorities reported were employee engagement, compliance with legislative requirements such as pay equity and transparency, and improved employee communication.
- Employee engagement: 58 per cent of organisations
- Compliance with pay equity and transparency rules: 47 per cent
- Employee communication: 42 per cent
Nearly half of organisations, 47 per cent, expect annual incentive plans to pay at or above target. Roughly 35 per cent of respondents plan to increase head count in 2026.
What a 3 per cent raise means for your paycheque
A 3 per cent raise increases a $50,000 salary by $1,500 a year before tax, and a $75,000 salary by $2,250. For many workers, that uplift may not fully offset rising living costs, especially where pay freezes, regional price differences, or household expenses vary.
The survey’s figure is an average. Actual increases will differ by sector, employer size, role and employee performance. Some organisations will fund additional adjustments through the extra payroll pool mentioned earlier, while others may use one-time lump-sum payments, targeted market adjustments, or incentive payouts.
How to respond as an employee
- Review your total rewards package, including benefits, bonuses, paid leave and retirement contributions, not just base pay.
- Ask your employer for clarity on the salary review process, timing and how performance is measured.
- If you plan to negotiate, prepare market data and specific examples of your contributions and impact.
- Consider timing, such as asking for a market adjustment or a lump-sum payment if base budgets are constrained.
- Invest in skills or certifications that align with market demand to strengthen future pay leverage.
Normandin Beaudry’s survey offers a high-level view of employer intentions for 2026. Individual outcomes will depend on company strategy, provincial conditions and your role within the organisation.
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