Salary increases for 2026: Canadian budget forecasts remain tightly aligned with summer projections 

In the closing months of 2025, nearly 400 organizations across Canada took part in Normandin Beaudry’s annual Salary Increase Pulse Survey, sharing valuable insights from coast to coast. 

With continued uncertainty in Canada’s market and trade environment, most organizations are planning to maintain their salary increase budgets. 

Results indicate that nearly three-quarters of organizations (74%) are not planning any changes to their initial salary increase budget, while only 26% of participating organizations are reporting changes to their initial budget from last summer. For organizations planning adjustments to their initial budget, the results are mixed with more than half making a reduction and the rest intending to increase their initial budget. In Canada, the overall national average budget projection decreased by 0.1% to 3.0%, slightly lower than the summer projection of 3.1%, excluding salary freezes. This aligns with the slow but steady decline in salary increase budgets observed since 2023. In addition to the traditional salary increase budget, 42% of respondents have allocated an average of 0.8% of payroll for additional budget funds.

Other economic indicators remain positive: nearly half of organizations (47%) expect their annual incentive plan (bonus) to pay out 100% or more of the target, and 35% of organizations are planning an increase in their workforce for 2026. 

In 2026, organizations are also focusing internally on their total rewards foundations, with strategies aimed at: 

• Employee engagement: 58% 
• Compliance with legislative requirements (pay equity and transparency): 47% 
• Employee communication: 42% 

With employees expecting greater levels of employer transparency, organizations are focused on developing and refining their broader employment experience. 

While data shows that annual salary increase budgets are stabilizing, it should be noted that 2026 projections remain slightly above both historical trends and current rates of inflation. The 2026 average projections by province and territory are summarized below.

The average salary structure increase for 2026 is now projected at 2.4%, excluding organizations that are anticipating a salary structure freeze (13.7% of organizations). These findings are slightly below initial findings observed over the summer months (2.6%). 

Looking for more information about the 2026 Salary Increase Pulse Survey and its results? Contact your Normandin Beaudry consultant or email us. 

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