Like many Canadians, you’re hoping to see a salary bump on your paycheque this year. A recent survey saw a projected 2025 salary increase budget of around 3.3%, according to Normandin Beaudry, an actuarial and total rewards consulting service. The survey, conducted in November 2024, comes from nearly 400 Canadian organizations to determine their salary increase budget.
"Organizations are trying to find the right balance between retaining top talent, while also managing their compensation spend to remain agile and competitive amid an evolving and uncertain geopolitical landscape,” Darcy Clark, Normandin Beaudry’s senior principal, compensation, said in a statement.
“While less aggressive than last year’s 3.6%, it’s important to note that the forecast for 2025 remains above historical norms and [is] outpacing current rates of inflation."
However, the survey also revealed 68% of participating organizations made no change to their initial 2024 summer budget forecast for 2025.
2025 salary increases
Of those changing their initial projections, 65% are reducing their initial budgets with cost reduction efforts as the main motivator. As well, on a year-over-year basis, the survey reveals continued gradual decline in average salary increase budgets following a series of sharp increases realized from 2021 to 2023.
As for what else the money can be used for, 42% of organizations that participated in the survey also plan to set aside an average additional budget of 0.9% in 2025.
"By reserving these resources, organizations are positioning themselves to better address potential challenges during the next compensation cycle," explained Clark.
"This strategy provides them with an opportunity to tackle internal inequalities more thoroughly with ad hoc salary adjustments. Additionally, setting aside a portion of their budget can help support salary increase differentiation for high performers and address retention efforts for highly strategic or business-critical roles."
Breakdown by industry
According to Normandin Beaudry’s survey, industries with the most substantial decreases are in the electronic gaming and visual effects, transportation and warehousing and telecommunications and data processing/warehousing industries. The company attributes the more conservative increase budget forecast from the survey to substantial increases to compensation programs implemented over the last several cycles, cost reduction efforts and decreased pressure for talent in the market.
To contrast, the initial salary increase budgets are increasing in finance and insurance, public services and pharmaceutical and biotechnology industries. Increases are likely linked to the competitive nature of the market.
Average total salary increase budget forecasts by ownership structure include:
- Not-for-profit organizations: 4.1%
- Privately held organizations (not listed on a stock market): 3.9%
- Publicly traded organizations (listed on a stock market): 3.4%
- Government organizations/Crown corporations: 3.6%
This article Are you expecting a raise this year? A more cautious salary increase budget is anticipated for 2025 in Canada
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
