If you’ve got a salary review coming up sometime soon, there’s some early data worth knowing about before you walk in. Consulting firm Normandin Beaudry just released the first preliminary forecast for salary increases across Canada in 2027, and the short version is that things are staying pretty steady.
More than 350 organizations took part in the survey, which ran over just three weeks. According to the results, the average salary increase budget for 2026 actually came in at 3.1%, a touch higher than the 3.0% originally forecast. For 2027, employers are expecting to hold that same pace, budgeting another 3.1% on average, not counting any salary freezes.
A technical recession
Canada officially entered a technical recession after two consecutive quarters of economic contraction. Despite that, companies don’t appear to be pulling back on their salary increase budgets, likely because losing staff right now would cost more than giving raises does.
Where employers are being more cautious is with the extra room they usually build in on top of that base budget, often referred to as the “bonus budget.” According to Normandin Beaudry, companies are waiting to get a clearer read on the economy this fall and winter before locking in exactly how generous that additional amount will be.
The extra cushion is shrinking a little
On top of the base budget, more than half of the Canadian organizations surveyed plan to hand out an average supplementary amount of 0.9% in 2027. That’s down slightly from the 1.1% actually granted in 2026 by that same group of organizations. Worth noting, though: going into 2026, that same supplementary budget had only been forecast at 0.8%, meaning employers ended up being a bit more generous last year than they’d originally planned.
That extra money typically goes toward things like:
- Adjusting salaries to keep up with the market
- Rewarding top-performing employees
- Retaining talent in strategic or hard-to-fill roles
- Speeding up salary progression for employees near the bottom of the pay scale
These are still preliminary numbers. While Normandin Beaudry’s survey has wrapped, the full detailed results aren’t expected until September. Last year’s final report broke things down by sector and province, so a similar breakdown is likely again this time.
In the meantime, one thing seems fairly clear: if you were hoping for a big salary jump in 2027, it might be worth adjusting those expectations. It could be worse. It could also be better.
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