Canadian workers can expect salary increases to surpass inflation in 2025, with the national average base salary set to rise by 3.6%, according to a new survey by Eckler Ltd. The projected increase, though slightly below the 3.8% actual increase seen in 2024, reflects a gradual return to pre-pandemic compensation patterns.
“As inflationary pressures dissipate, planned salary increases are moderating more slowly, resulting in larger real compensation increases for employees,” said Anand Parsan, National Compensation Practice leader at Eckler. “We are beginning to see a reversion to pre-pandemic norms.”
The survey, which gathered responses from over 500 organizations across Canada, indicates that British Columbia is set to lead the provinces with a 3.9% average increase, followed closely by Alberta at 3.8%. The lowest projected increases are in Prince Edward Island and Yukon, with estimates of 2.8% and 3.1%, respectively.
Greater certainty in salary planning
The survey results suggest increased certainty in 2025 salary planning, with only 18% of organizations reporting undecided salary budgets, compared to 58% in 2024.
“As the labour market continues to rebalance, organizations are shifting their attention towards effectively managing their compensation programs,” Parsan said. This includes how they communicate total rewards, ensure transparency, and maintain effective and equitable pay practices.
However, certain sectors are expecting constrained budgets. Nearly half (44%) of surveyed healthcare organizations and 21% of educational institutions are projecting salary freezes in 2025.
Regional and sectoral breakdown
Among the provinces, Western Canada is poised for the highest salary increases, ranging from 3.6% to 3.9%, with British Columbia at the top. Real estate is the industry with the highest projected average increase at 4.2%, while healthcare and education report the lowest at 2.8% and 2.9%, respectively.
HR priorities for 2025
The survey also highlights key human resource initiatives for the upcoming year. More than half of respondents identified updating job descriptions (56.1%) and participating in salary benchmarking surveys (55.4%) as priorities. Other notable initiatives include enhancing total rewards strategies to be more flexible and employee-centric (46.6%) and conducting pay equity analyses (30.6%).
Increased attention to pay transparency and pay equity legislation is prompting employers to enhance communication and education around internal compensation programs, Eckler noted.
The data was collected between June and August 2024 and offers insight into salary trends, pay practices, and HR priorities across Canada.
