Canadian employers are signaling a shift in how they approach compensation for 2026
Canadian organizations plan to increase salaries by 3.11 per cent for non-unionized workers in 2026, marking the third consecutive year of declining wage growth projections, according to TELUS Health’s 43rd annual Salary Projection Survey released last week.
The forecast reflects growing caution among employers facing market uncertainty and international tariff concerns. Despite the slower growth, projected salary increases still exceed Canada’s current 1.9 per cent inflation rate, ensuring workers maintain purchasing power for the second straight year.
“Three years running, we’re seeing salary projection declines—a clear signal that economic uncertainty and stabilizing inflation are fundamentally reshaping how Canadian organizations approach compensation strategy,” said Guylaine Béliveau, national practice leader – compensation consulting at TELUS Health.
The survey, based on data from more than 375 Canadian organizations collected between June and August 2025, shows notable regional variations. Manitoba leads provincial projections with a 3.43 per cent increase, followed by New Brunswick at 3.25 per cent, and Quebec at 3.21 per cent. New Brunswick was the only province to register growth in salary increase rates for 2026, jumping 0.37 percentage points over 2025.
Saskatchewan ranked last among provinces with statistically significant results, projecting only a 2.95 per cent increase and registering the largest drop since 2025.
Industry projections reflect ongoing market pressures. High technology leads with projected increases of 3.64 per cent, followed by oil and gas at 3.58 per cent and life sciences at 3.39 per cent. Business services sector expects the smallest increases at 2.60 per cent.
Information technology showed the largest growth in salary increase rates, jumping 0.51 percentage points to 3.25 per cent for 2026. Real estate suffered the biggest decline, dropping 1.03 points to 3.25 per cent.
Organizations increasingly turn to artificial intelligence to boost productivity as salary budget growth slows. The survey found 77 per cent of organizations now explore AI use, up from 74 per cent last year. Enterprise-wide AI consideration increased to 31 per cent from 23 per cent previously.
“This report underlines the opportunities for employers to strategically differentiate themselves through competitive, equitable, and wellbeing-aligned compensation practices,” said Joseph De Dominicis, national consulting leader at TELUS Health.
The survey emphasizes that successful employers pair fair base pay with comprehensive wellbeing packages including flexible health coverage, mental health support, and flexible work arrangements to attract and retain talent during uncertain times.
