Canadian salary increases for 2026 hold close to summer budget expectations

This trend reflects a gradual but sustained easing in budget expectations observed since 2023, as organizations balance the need to manage payroll costs with competitive compensation demands.

The survey finds a strong majority of employers (almost three quarters) are not planning to alter their initial salary budget projections from the summer. Among the minority that are changing their forecasts, more than half intend to reduce planned increases, while the remainder expect to raise them.

In addition to base salary budgets, 42% of respondents have allocated extra funding, averaging about 0.8% of payroll, to support compensation challenges such as retention and targeted pay moves.

Amid these budget patterns, companies are prioritizing comprehensive total rewards strategies. With heightened expectations for transparency and compliance, many employers are enhancing employee engagement initiatives, aligning with legislative requirements like pay equity and transparency, and improving internal communications around compensation. These efforts are aimed at strengthening the overall employee experience beyond traditional base pay increases.

Other indicators from the survey suggest continued optimism in workforce planning. Nearly half of participating organizations expect their annual incentive plans to pay out at or above target levels in 2026, and roughly one-third plan to grow their workforces over the course of the year. This suggests that investment in talent and performance remains a focus even as salary increase budgets moderate.