Employers in Canada aren't planning big raises despite drastic cost of living increases

The cost of living may be higher than ever in Canada, but anyone who has been counting on their employer to help ease their financial stress with a raise in the coming year probably shouldn't hold their breath, according to a new survey.

Employers nationwide are apparently not planning substantial wage increases for their staff despite the sky-high prices of rent, groceries, and other necessities, with respondents to a poll from consulting firm Mercer saying they intend to scale down pay increases, even for excellent performance.

Are you surprised by this?https://t.co/2etsw4OzgL #Toronto #CostOfLivingCrisis

— blogTO (@blogTO) September 22, 2023

Based on feedback from companies across 15 industries, bosses anticipate raising salaries a mere 3.3 per cent in 2024, on average, for merit, and are budgeting only 3.7 per cent or so more for wage increases in general for non-unionized workers. 

This is less than this year, when the typical merit-based raise in Canada was about 3.5 per cent of one's salary, and raises for other reasons (such as cost of living adjustments and promotional pay increases) averaged around 4.1 per cent.

Meanwhile, consumers are paying up to 30 per cent more for some things than they were at this time last year; seven per cent more for food specifically, and 6.5 per cent more for rent.

Canadian companies say they'll be issuing lower raises in 2024 than in 2023, per the August 2023 Mercer QuickPulse™ Canada Compensation Planning Survey.

Along with not adequately responding to inflation with proportionate salary raises, firms also have little interest in being more transparent about what they pay their teams.

More than half of respondents (51 per cent) said they have "no plans to go further with pay transparency" than is required by law, and only 15 per cent include salary ranges in job postings.

Despite prices remaining untenably high for basic necessities, employers in Canada don't appear to be matching inflation with pay increases.

With costs for everything slated to remain exorbitant and hundreds turning out to hiring events for even basic entry-level positions, it is understandable why some may fear the prospect of finding a new job, and may stay in a position even if they don't get a raise they desperately need and deserve.