Canadian salary increases will drop to 3.3% for 2026

TORONTO, CA, October 16, 2025—Canadian organizations are planning average base salary increases¹ of 3.3% in 2026, according to Eckler’s latest compensation eplanning survey (excluding salary freezes).  This is slightly below the actual increase of 3.4% in 2025, signalling a more cautious approach to budget planning amid slowing economic conditions and stabilizing inflation. While the Bank of Canada is cutting interest rates to ease borrowing costs and stimulate growth, rising unemployment and ongoing uncertainty are keeping employers conservative. At the same time, soaring housing costs and persistent inflation continue to exert upward pressure on wages.

“Employers are signalling that while the economy has cooled, the war for talent is not quite over,” said Anand Parsan, Principal at Eckler.  “Only 5% of employers are considering salary freezes, and while 29% remain undecided, most are planning similar or lower salary increases compared to 2025.  Trade tensions between Canada and the U.S. are also contributing to financial uncertainty, prompting employers to balance cost control with the need to reward and retain key talent.”

Regional highlights:

The West leads in wage growth, while Atlantic provinces, Quebec, and the northern territories lag behind.

• Highest increases: Alberta and British Columbia (3.4%), followed by Saskatchewan (3.3%).
• Moderate increases: Ontario, Manitoba, New Brunswick, Nova Scotia, and Yukon (3.2%)
• Below average increases: Quebec, Prince Edward Island and Northwest Territories, are anticipating increases that are below the national weighted average (3.1%)
• Lowest increases: Newfoundland & Labrador (3.0%) and Nunavut (2.3%)