Today Statistics Canada released the latest inflation figures, revealing that the Consumer Price Index (CPI) rose to 1.9% in January. This latest update underscores the ongoing economic pressures impacting both employers and employees. However, while inflation is a crucial economic indicator, it should not be mistaken for a direct determinant of salary increases. 

Should You Rely On Inflation To Determine Salary Increases?

Inflation, as measured by the CPI, tracks changes in the cost of goods and services. It provides valuable insight into shifts in purchasing power but does not account for market-driven compensation trends, organizational performance, or individual employee contributions. 

Employers who rely solely on CPI or cost-of-living adjustments (COLA) may find their compensation strategies misaligned with market realities. Market-based salary increases consider factors beyond inflation, such as industry trends, talent supply and demand, and competitive positioning within the sector. 

A Comprehensive Approach to Salary Increases 

Rather than focusing on inflation, organizations should take a market-based approach to compensation, balancing economic trends with salary movement data. WCBC’s annual Salary Increase Report provides organizations with critical insights into how salary increases are actually being implemented across Canada, offering a more accurate benchmark for decision-making. 

To access the latest salary increase trends and ensure your organization remains competitive, visit our Salary Reports page.