Two-thirds of employers say increases for 2026 to be lower than those given in 2025
As Canada braces for an economic slowdown in 2025 and 2026, a new survey reveals that employers are tightening their belts—and paycheques may soon feel the pinch.
With the OECD warning of slower growth and rising unemployment, Canadian organizations are recalibrating their compensation strategies to weather the storm, according to Gallagher.
Nearly two-thirds of participating organizations indicate that the increases planned for 2026 will be lower than the increases granted in 2025.
The average salary bump for non-unionized employees is expected to drop to 3.1% in 2026, down from 3.5% this year and 3.8% in 2024—a return to pre-pandemic norms.
Not all regions and sectors are feeling the squeeze equally. Quebec leads the pack with the highest actual and forecasted salary budgets (3.4% and 3.2%, respectively).
Legal services, real estate, and professional services are the most generous sectors, offering increases of 3.7%, 3.5%, and 3.4%, says Gallagher.
On the flip side, educational services, municipalities, and foundations are holding the line at the lower end, with raises as modest as 2.7%.
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