Canadians can expect to see average base salary increases of 2.4% in 2016, according to a national survey of more than 525 Canadian public and private sector employers conducted by Toronto-based consulting firm Hay Group in June and July.
The 2.4% projection is lower than the 2.6% projection for 2015, continuing a downward trend in Canadian salary increases that has developed since the start of the economic downturn in 2008-09.
According to the survey, 70% of Canadian employers forecast that they will provide their employees with base salary increases in 2016, which is significantly less than the 83% of employers who projected increases for 2015. This is due to continued economic uncertainty across many sectors in the Canadian economy and to the fact that more employers are now adopting a “wait and see” position before increasing their budgets.
Due to the high demand for skilled labour, workers in the oil and gas sector have traditionally received the highest salary increases in Canada. However, with the economic impact of collapsing oil prices over the past year, these workers are now projected to receive the lowest increases in the country ,at 1.5% as employers shed jobs and the labour supply now exceeds demand.
Credit unions (3%), leisure/hospitality (3%) and insurance (2.9%) will lead all sectors with forecasts higher than the national average of 2.4%, the survey suggests.
Saskatchewan (2.7%) and Alberta (2.5%) still lead the country with projected overall base salary increases higher than the national average, according to the survey. However they are significantly lower than in recent years, due mainly to the global softening in commodities prices, particularly in the Alberta oil and gas sector, the survey notes.