Canadian Employers Hold the Line on Salary Increases in 2027

Canadian employers are planning to keep salary budgets largely unchanged for a third consecutive year in 2027, according to Mercer Canada's July 2026 survey.

The survey, which drew on responses from over 470 Canadian organizations across 15 industries, found that employers plan to budget an average merit increase of 3.0% and total salary increases of 3.2% in 2027.

This is virtually identical to actual increases reported in both 2025 and 2026, when merit came in at 3.0% and total increases at 3.3%.

More than half of respondents, 60%, said they expect the economy to have at least a moderate impact on their compensation decisions in 2027.