Canadian Manufacturing

Strong wage increases across Canada, despite slowed economic growth: survey

by CMO Staff   

Canadian Manufacturing
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Salaries are expected to increase by 2.7% in 2020, according to HR services provider Morneau Shepell

TORONTO – Employers in Canada are expecting base salaries to rise by an average of 2.7 per cent in 2020, according to Morneau Shepell’s 2020 Salary Projection Survey. This is an increase from the actual 2.6 per cent average increase in 2019. The forecast includes increases in salary structure, length of service, cost of living and merit pay, and excludes salary freezes and promotional adjustments.

The expected 2.7 per cent increase is higher than the projected rate of inflation for the year. In July, the Bank of Canada noted that consumer price index inflation is expected to rise to about 2.0 per cent by the end of 2020. When looking at economic growth, according to the Bank of Canada, the Canadian economy is projected to grow by just 1.4 per cent in 2019.

“While the Canadian economy is projected to see slowed growth in the coming year, we’re expecting to see continued wage increases as a result of the tightening labour market,” said Anand Parsan, vice president, compensation consulting practice. “Employers are optimistic about the anticipated growth in 2020. We have seen a steady rise in projected base salary increases over the past few years, with actual numbers equal to or above our forecast since 2017.”

The survey highlighted some provinces that are expecting higher than average salary increases in 2020. Employers in Newfoundland and Labrador are expecting the highest annual salary increases at 3.1 per cent, led by rising oil production and mineral fuels mining in the region, according to the latest economic outlook from the Conference Board of Canada.


This is inconsistent when compared to the trend witnessed in 2019, when British Columbia and Alberta led the country in expected salary increases. Looking forward to 2020, employers in British Columbia are expecting salary increases of 2.8 per cent, while employers in Alberta, Ontario and Quebec expect salaries to increase 2.7 per cent. Salary expectations in other provinces range from 2.5 to 2.9 per cent.

“As the war for talent continues and employees become more comfortable negotiating higher salaries and benefits, it’s critical that employers design robust compensation strategies to remain competitive,” says Parsan. “We have seen that the most successful employers are those who support the financial, mental, physical and social well-being of their people.”

Morneau Shepell’s 37th annual Salary Projection Survey (formerly Trends in Human Resources survey) was conducted from July to August 2019, with input from 506 organizations employing more than one million employees across Canada in a broad cross-section of industry sectors.


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