Canadian salary increase budgets projected to grow 3.0% in 2026

Salary increase budgets in Canada are projected to grow an average of 3.0% in 2026, according to a report from Normandin Beaudry. The Montreal-based actuarial and total rewards consulting firm surveyed nearly 400 Canadian organizations in the fourth quarter of 2025.

The 3.0% figure is a reduction of 0.1% from summer 2025’s results, and continues a steady decline in salary increase budgets since 2023.

“As economic and trade uncertainty continues to shape Canada’s market, organizations are taking a cautious, gradual approach to salary increase budgets,” said Darcy Clark, senior principal, compensation at Normandin Beaudry.

The survey found that 74% of organizations are not planning any changes to their initial salary increase budget projections from last summer. Of the 26% planning to adjust the initial budget, more than half will be making a reduction.

In addition to the traditional salary increase budget, 42% of organizations have allocated an average of 0.8% of payroll for additional budget funds.

Normandin Beaudry says that other economic indicators were positive, with 47% of organizations expecting their annual incentive plan to pay at or above target and 35% of organizations planning to increase their headcount during 2026.