Canadians to see salaries increase 2.6%

Canadian employees can expect an average salary increase of 2.6% in 2014, finds a survey of public and private sector employers by Hay Group.

The projected increase is lower than the projection for 2013 (at 2.9 %) and continues to be relatively close to projected increases of 2.8% for American employees. U.S. average projections are also lower for 2014 than they were a year ago.

Read: Employment issues plague retail sector

Projected increases for Canada continue to be much lower than projected increases of 3.7 % before the downturn.

Resource-based provinces lead

This year, the highest increases are in the Oil and Gas sector at 4% despite the strategic issues in the industry that have caused some moderation in long term investment. Services (at 3.3%), Credit Unions (at 3.2%), Chemicals (at 3.1%) and Utilities (at 3.0%) are also forecasting increases that are higher than the national average. These high forecasts are a continued reflection of the demand for key skills and experience.

Read: Canadian employment woes persist: Survey

Not surprisingly, Newfoundland and Labrador (at 4.0%), Saskatchewan (at 3.4%) and Alberta (at 3.2%), lead the country, buoyed by the demand for key skills in the resource industries despite the challenges in these markets. A clear divide between the provinces continues, with resource-rich provinces coming in between 3.2 – 4.0%, with the rest of Canada predicting increases of 2.1% to 2.6%, all of them at or below the national average.

Province	2014 projection	2013 projection	2012 projection	2011 projection
BC	2.3%	2.7%	2.5%	2.4%
Alberta	3.2%	3.6%	3.4%	2.9%
Saskatchewan	3.4%	3.2%	3.2%	3.3%
Manitoba	2.6%	2.7%	2.5%	2.7%
Ontario	2.5%	2.7%	2.7%	2.4%
Quebec	2.6%	2.7%	2.8%	2.7%
Maritimes	2.1%	2.6%	2.4%	2.7%
Newfoundland	4.0%	3.4%	3.4%	3.5%
GTA	2.5%	2.8%	2.7%	2.5%

Read: U.S. should focus on boosting employment

The sectors with the lowest projections for 2013 are Leisure/Hospitality (at 2.0%), Retail, Consumer Durables and Forestry & Paper (all at 2.1%). Overall, the public sector is forecasting noticeably lower salary increases (at 2.3%) than is the private sector (industrial and financial at 2.7%).

Canadians fare better

Canadian projections rank about average against some industrialized nations, above France (at 2.5%); Italy (at 2.2%) and Japan (at 2.0%), but behind others such as the US (at 2.8%) and UK (at 2.9% %). Canada still lags far behind the forecasts for India (at 10.8%), China (9.0%) and Russia (at 8.0%).

Read: Labour market conditions weaken for young Canadians

Additional findings include:

• The actual base salary changes realized in 2013 were exactly as forecasted for the industrial (2.9%) and public sectors (2.5%) but lower in the financial sector (2.6% realized against 2.9% forecasted);
• Saskatchewan and Newfoundland – two of last year’s biggest winners – have the highest 2014 base salary projections ;
• 2014 projections for Alberta are lower than they were in 2013, but still rank 3^rd highest in Canada;
• BC is showing projections lower than last year and below the national average,
• Ontario and the GTA at 2.5% are below the national average;
• 2014 projections for China and Russia, while still much higher than most economies, have moderated between one-half to 1% from those made for 2013, while the projections for India have increased by more than one-half percent over 2013;

The opportunity to receive short-term incentives has increased for senior and middle management in the private sector, but there are fewer opportunities for employees at the supervisory and clerical levels.