If you were hoping that 2026 would be the year of the massive "catch-up" raise, I’ve got some bittersweet news. Honestly, it’s not looking like the windfall many expected. After a few years of wild inflation and companies scrambling to keep staff from jumping ship, things are getting a lot more predictable. And "predictable" in HR-speak usually means the numbers are staying pretty flat.
For anyone tracking the average salary increase Canada is looking at this year, the magic number is hovering right around 3.3%.
That’s basically what we saw in 2025. According to fresh data from Mercer and Eckler, Canadian employers aren't really planning to crank up the volume. Instead, they're settling into a "new normal" where merit increases stay modest, even as the cost of a bag of milk or a liter of gas keeps people sweating.
The 3.3 percent reality check
So, where does that 3.3% actually come from? It’s a total budget number. This includes merit raises, cost-of-living adjustments, and those "market corrections" companies do when they realize they’re paying someone way below the industry standard. If you look at just merit increases—the stuff based on your performance review—that number drops to about 3.0%.
Basically, if you’re an average performer, you might see a three-percent bump. If you’re a rockstar, you might squeeze out a bit more, but the "pool" your boss is drawing from hasn't grown.
Why the brakes are on
It’s not just corporate greed, though that’s a popular theory at the water cooler. Employers are genuinely nervous. Roughly 66% of Canadian organizations say they’re worried about the economy’s impact on their bottom line this year.
We also have to talk about the "U.S. factor." With ongoing talk of tariffs and trade shifts south of the border, many Canadian firms are holding onto their cash. They’d rather be safe than sorry. It’s a cautious vibe. You’ve probably noticed it if your office has been quieter lately or if that open role in your department hasn't been filled in months.
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High tech vs. the rest of us
Not all industries are created equal. If you work in professional services or banking, you might be looking at something closer to 3.7%. Why? Because those sectors are still fighting a "war for talent" that never really ended.
On the flip side, if you're in education or healthcare, the projections are grimmer—coming in at around 2.9%. It’s a bit of a slap in the face for frontline workers, but these sectors are often tied to tight government budgets or "legacy" structures that don't move fast.
- Professional Services: 3.7%
- Agribusiness / Banking: 3.6%
- Retail & Manufacturing: 3.2%
- Education / Healthcare: 2.9%
- Energy / Oil & Gas: 3.0%
Interestingly, High Tech is seeing a bit of a cool-down. It used to be the industry where 5% raises were the floor. Now, it's hovering around 3.5%. Still better than the national average, but the "spend-at-all-costs" era is definitely over.
The promotion trap (and how to avoid it)
Here’s a stat that might annoy you: companies plan to promote fewer people in 2026. Last year, about 9.8% of the workforce got a title change. This year, that’s expected to drop to 8.7%.
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If you do get promoted, the average pay bump for moving up a level is roughly 9%. Ten years ago, a promotion usually meant a 10% to 15% jump. Now, employers are being a lot more stingy with the "step-up" pay.
Geography matters (Sorta)
Where you live in Canada still plays a role, but the gap is closing.
British Columbia and Alberta are leading the pack with projected increases of 3.4%. Quebec and Ontario are right behind at 3.1% to 3.2%. If you're out in Newfoundland & Labrador or Nunavut, things are tighter—think closer to 2.3% or 3.0%.
But honestly, with remote work still being a thing for many white-collar roles, these regional differences aren't as set in stone as they used to be. A tech worker in Halifax might be getting "Toronto wages" if they’re working for a firm on Bay Street.
What's the deal with "Pay Transparency"?
You might have heard that Ontario and other provinces are pushing for more transparency. This is actually changing how the average salary increase Canada provides is calculated.
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Companies are realizing they can't just give one person a huge raise in secret anymore. If they have to post salary ranges on job ads, existing employees are going to see them. This is forcing HR departments to do "pay equity audits."
Instead of giving a few top performers 6% raises, some companies are taking that money and using it to bring everyone up to a fair baseline. It’s better for fairness, but it might mean your individual "over-performance" doesn't result in the massive check you were hoping for.
Making the most of a 3 percent year
If you’re sitting there thinking, "3.3% won't even cover my rent increase," you're right. It won't. So, how do you actually get ahead?
- Ask for a "Market Adjustment," not just a raise. If you can show that people in your role are making $10k more elsewhere, you're not asking for a merit increase; you're asking the company to fix a mistake.
- Focus on "Other" Rewards. Since cash is tight, companies are more likely to say yes to more vacation time, a four-day work week, or a stipend for home office gear.
- Upskill for the "High Demand" sectors. As we saw, professional services and tech are still paying more. If you can bridge your current skills into those areas, your personal "average salary increase" will look a lot better than 3.3%.
The reality of the 2026 pay cycle is that it’s a year of consolidation. Employers are playing defense. They aren't trying to lose you, but they aren't exactly throwing money around like it's 2022 either. Understanding these numbers doesn't just help you manage your expectations—it gives you the data you need to negotiate when you finally sit down with your boss.
Actionable next steps
- Check your current standing: Look up recent salary surveys from firms like Robert Half or Mercer specifically for your job title and city.
- Document your impact: Don't just wait for your review. Start a "brag sheet" now with specific dollar amounts or time savings you've generated for the company.
- Review your total rewards: Sometimes a bump in your RRSP matching or an extra week of PTO is easier for a manager to approve than a base salary hike that exceeds their 3% budget cap.