Canada: Employers Project 2.6 Percent Wage Growth in 2016

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By Peter Menyasz

Nov. 3— The continued slow growth of the Canadian economy will limit base salary increases for non-union employees to 2.6 percent in 2016, according to the Conference Board of Canada. Unionized employers project increases of 1.9 percent for their employees in 2016, up slightly from the 1.8 percent actual average wage growth in 2015.

Wage growth projected for 2016 by major employers in the Conference Board's annual Compensation Planning Outlook survey is smaller than the 3.2 percent average salary growth for employees who received an increase in 2015, but larger than the 2.4 percent inflation rate projected for 2016, the Ottawa-based private sector think tank said Oct. 29.

“Employers remain cautious about Canada's economic performance and are opting for modest wage increases,” Lynn Stoudt, the conference board's vice president of leadership and human resources research, said in a statement.

Employers in Alberta, for years the national leaders in wage growth due to a boom in the province's oil and gas sector, expect to provide employee wage increases averaging only 2.4 percent in 2016, higher only than the 2.3 percent average in British Columbia, Stoudt said. Employees in the oil and gas sector are expected to receive increases averaging only 2.1 percent in 2016.

By the Numbers

The survey projects above-average wage growth in the chemical, pharmaceutical and allied products industries (2.9 percent); finance, insurance and real estate (2.8 percent); high technology (2.8 percent); and accommodation, food and personal services (2.8 percent), below-average growth in the communications and telecommunications industries (2.4 percent); manufacturing (2.4 percent); natural resources (2.4 percent); wholesale trade (2.4 percent); scientific, construction and engineering services (2.3 percent); utilities (2.3 percent); oil and gas (2.1 percent); and health (1.5 percent).

Other study findings included:

• only 5 percent of employers project salary freezes in 2016 compared to 12 percent in 2015;
• the vast majority of unionized employers (88 percent) do not expect work stoppages in 2016;
• professions experiencing the strongest demand for new employees are specialist information technologies, skilled trades, engineering, management and sales and marketing;
• the voluntary turnover rate thus far in 2015 is 7.6 percent, up from 7 percent in 2014;
• the average absenteeism rate this year is 6.5 days per employee; and
• fewer Canadian employers are facing challenges in recruiting and/or retaining staff than in recent years, 59 percent reporting difficulties in 2015 compared to 64 percent in 2014.

 

To contact the reporter on this story: Peter Menyasz in Ottawa at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

The Conference Board report is available at http://www.e-library.ca.

For more information on Canadian HR law and regulation, see the Canada primer.