Canadian workers could be in line for yet another significant salary boost in 2026, according to fresh forecasts released by experts in the employment and compensation sector. Labour market dynamics across the country continue to shift, with inflation easing, immigration remaining high, and businesses battling to retain top talent in an increasingly competitive hiring landscape. These trends offer a promising outlook for workers hoping for higher wages in the coming years.
The new projections indicate that base salaries could rise by an average of 3.6% in 2026, mirroring the increase seen in 2024 and creating positive momentum for professionals across many sectors. However, these national averages only tell part of the story. The projected increases vary considerably based on industry, role, and region — meaning not everyone will benefit equally.
As businesses adjust to economic factors such as interest rate fluctuations, slowing inflation, and the rise of hybrid work, many are reevaluating their compensation strategies. For Canadian employees weighing job offers or negotiating salary increases, understanding these forecasts could provide a critical edge in future earnings and career decisions.
Canada 2026 Salary Forecast at a Glance
| Category | Details |
|---|---|
| Projected base salary increase (average) | 3.6% |
| Top-performing sectors | Tech, Finance, Engineering, Skilled Trades |
| Lagging sectors | Retail, Hospitality, Non-profit |
| Key driver of compensation increases | Retention and attraction of skilled talent |
| Inflation adjustment | Forecast outpaces 2025 projected inflation rate |
| Flexible/hybrid work impact | Higher pay for in-demand remote-compatible roles |
Why pay raises are expected to continue in 2026
According to compensation specialists, the upcoming 3.6% average pay raise in 2026 will reflect ongoing employer pressure to secure scarce talent. Many employers previously underestimated the persistence of labour shortages, and as demographics evolve and baby boomers exit the workforce, employers will still face persistent staffing gaps.
In addition, Canada’s strong population growth — heavily driven by immigration — has sparked increased demand in several sectors, particularly in urban hubs like Toronto, Vancouver, and Calgary. With a larger population comes greater demand for goods, infrastructure, and services — putting pressure on employers and pushing salaries upward.
What changed this year and how it affects 2026
2024 saw a strong rebound in salary increases after a turbulent pandemic-era slowdown. As businesses regained footing, many budgeted for higher payroll expenses to account for inflationary impacts and improve employee retention. With inflation projected to stabilize in 2025 and 2026, salary increases are transitioning from reactive inflation adjustments to strategic competition tools.
Employees also gained significant bargaining power during the early 2020s due to widespread labour shortages. That leverage is continuing into 2026, where certain candidates, especially in STEM fields and skilled trades, are able to command multiple offers and negotiate significantly higher wages or signing bonuses.
Industries driving the biggest salary increases
While the forecast average of 3.6% is already sizable, several sectors are expected to significantly outperform this baseline. According to analysts, **technology**, **finance**, **healthcare**, and **engineering** are among the industries forecasted to offer the highest annual wage growth in 2026.
These sectors remain hotbeds for innovation and expansion, particularly as Canada embraces digital transformation and infrastructure modernization. AI, cloud computing, cybersecurity, and fintech continue to dominate demand for tech professionals, while aging populations drive need for more medical and support staff across provinces.
Winners and losers in the 2026 salary forecast
| Winners (Highest increases) | Losers (Lowest increases) |
|---|---|
| Information Technology | Retail |
| Financial Services | Hospitality |
| Healthcare & Pharmaceuticals | Public Sector (select roles) |
| Professional Services & Consulting | Non-profit |
| Trades & Skilled Labour | Arts & Entertainment |
The salary equity question
Even with an average rise of 3.6%, not all workers will receive equal increases. There’s growing attention to wage disparities based on factors such as gender, race, and geography. In high-cost cities, workers suffering from wage stagnation could effectively earn less in real terms, as their expenditures outpace income growth.
Corporate HR leaders are under pressure to address internal wage equity concerns. Many are turning to **pay transparency practices** and redefining performance metrics that ensure underrepresented groups are not excluded from merit-based increases or promotions.
“Real wage growth isn’t just important for workers — it’s vital for long-term economic stability. Employers offering competitive, equitable pay foster not only retention but economic mobility.”
— Michaela Raymond, Senior Labour Economist
Remote work and geography’s role in future pay trends
One wildcard influencing 2026 salary forecasts is the growing divide between remote and on-site compensation models. As more roles become location-agnostic, employers are exploring **differential pay scales** based on cost of living or regional labour markets.
For example, a developer working remotely in Halifax might earn less than their counterpart in Toronto for the same role, even if their output is identical. This trend may shape future salary negotiations and force workers in lower-cost regions to reevaluate trade-offs between lifestyle and pay.
Bonuses, promotions, and total rewards also growing
Base salaries are only part of the picture. In many high-performing sectors, variable compensation is rising faster than fixed wages. **Annual bonuses**, **stock options**, and **profit-sharing schemes** are increasingly offered to workers in mid and senior-level positions, especially where employers seek to lock in top talent.
Moreover, companies are bolstering **total rewards packages**, which include mental health benefits, flexible scheduling, and learning stipends. These non-cash perks are increasingly valued by younger workers and can play a crucial role in retaining Gen Z and millennial employees.
“The war for talent isn’t just about who pays more—it’s about who provides a fuller, more human-centered employment experience.”
— Adil Sharif, Employer Branding Strategist
How Canadians can best position themselves for higher pay
In light of these growing opportunities, Canadian workers can take proactive steps now to benefit from forecasted wage growth in 2026 and beyond. Upskilling is a major advantage: short certifications in programming, analysis, and management can significantly improve one’s positioning in a competitive job market.
Networking, mentorship, and staying informed about industry salary benchmarks are also essential. As large employers publish pay bands and become more transparent, savvy job seekers can use data to inform their expectations and negotiate stronger offers.
Will salary growth outpace inflation this time?
Economists expect the inflation rate to stabilize at around 2% by the time 2026 arrives, meaning that a 3.6% average increase could offer real purchasing power gains for many Canadians — barring significant disruptions to global markets or domestic monetary policy.
However, actual outcomes will depend on numerous unpredictable variables, including geopolitical events, central bank decisions, and even natural disasters. Workers are advised to focus on controllables, like skill development and professional development strategy.
Frequently Asked Questions (FAQs)
How much are Canadian salaries expected to increase in 2026?
The average base salary in Canada is forecasted to rise by approximately 3.6% in 2026, based on current labour market projections.
Which sectors will see the largest pay increases?
Technology, finance, healthcare, skilled trades, and engineering are expected to experience the most significant salary growth.
Will 2026 salary increases beat inflation?
Yes, if inflation remains near its projected 2% rate, a 3.6% wage increase will offer real gains for many employees.
Are employers still offering remote work salary premiums?
It depends on the industry and company. Some continue offering location-neutral pay, while others scale compensation according to geography.
How can I prepare to negotiate a higher salary in 2026?
Start by upskilling, keeping up with industry trends, reviewing salary benchmarks, and documenting your accomplishments to strengthen your case.
Are temporary bonuses included in the 3.6% salary growth projection?
No. The 3.6% refers to base salary increases. Bonuses and other incentives are often separate and variable depending on employer policy and performance.