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Canadian Workers in for Another Year of Modest Salary Gains Amid Slow Economic Growth

In response to widespread uncertainty about Canada’s economic climate and business conditions, organizations are planning cautious salary increases for 2017. The Conference Board of Canada’s Compensation Planning Outlook 2017 projects average base increases for non-unionized employees to be 2.2 per cent next year, with the lowest increases going to workers in Alberta and in the oil and gas industry.

Ottawa, October 26, 2016—In response to widespread uncertainty about Canada’s economic climate and business conditions, organizations are planning cautious salary increases for 2017. The Conference Board of Canada’s Compensation Planning Outlook 2017 projects average base increases for non-unionized employees to be 2.2 per cent next year, with the lowest increases going to workers in Alberta and in the oil and gas industry.

“The economic growth we saw in the first quarter of 2016 quickly tapered off and the energy sector has been hit particularly hard. While conditions are expected to improve, Canadian organizations are being cautious and opting for another year of modest wage increases,” said Allison Cowan, Director, Compensation Research Centre, The Conference Board of Canada.

Highlights

  • The base pay increase for non-unionized employees is expected to average 2.2 per cent in 2017.
  • Workers in the high technology sector are projected to receive the highest increases at 2.8 per cent. On the other hand, workers in the oil and gas sector are estimated to receive the lowest pay raises among the industries at 1.1 per cent.
  • Job creation in 2016 is projected to be weak at just 107,000 jobs nationally, the worst performance since the 2008–09 recession.

In contrast to years prior to 2015 where Alberta and the oil and gas sector consistently had the highest increases in the country, workers in the province and specifically those in the oil and gas sector will have the lowest raises this year. Alberta saw the lowest increases in 2016 and it is projected they will experience the same in 2017 at just 1.4 per cent.

Energy companies are grappling with low oil prices as well as the recent wildfires in the oil patch and the subsequent temporary shutdown of oil production. These influences, compounded by low business investment in the sector, are contributing to projected salary increases in the oil and gas industry to be the lowest among all industries for 2017 at just 1.1 per cent. Further demonstrating the economic hardship felt by many organizations in the industry, nearly half (48 per cent) are planning to freeze salaries in 2017. The highest salary gains are expected for the high technology industry at 2.8 per cent, followed closely by the food, beverage, and tobacco industry and the finance, insurance, and real estate industry, both at 2.7 per cent.

Regionally, workers in Manitoba are expected to have the highest pay raises with an average projected increase of 2.7 per cent. In Quebec and British Columbia, workers can expect salary gains at 2.5 per cent, and those in Ontario and Saskatchewan at 2.4 per cent. In the Atlantic provinces, the projected increases are low at just 1.9 per cent.

Job creation in 2016 is projected to be weak at 107,000 jobs nationally, the worst performance since the 2008–09 recession. The percentage of organizations experiencing difficulty recruiting and retaining employees with specific skills is 58 per cent, in line with the 59 per cent who reported these challenges last year. The top professions in highest demand include specialist IT, skilled trades, engineering, management, and sales and marketing.

The 35th edition of the Compensation Planning Outlook summarizes the results of The Conference Board of Canada’s annual compensation survey and forecast. Conducted in August 2016, 383 organizations participated in this research.

Allison Cowan will be presenting highlights from the report at a live webinar on November 2, the Compensation Planning Outlook Webinar for 2017.


For more information contact

Corporate Communications
613-526-3280
corpcomm@conferenceboard.ca


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