A cautious outlook, not a standstill

For non-union employees, participating organizations project average salary increase of 3.4%, with a median of 3.2%. Formal non-union salary structures are expected to move more slowly than actual salaries, with both projected average and median salary range increases of 2.5%.

That gap matters. An organization can approve a reasonable increase budget and still lose ground if its salary structure or individual salaries are already below market. Salary increase data helps establish the pace of movement, while market data for positions is needed to determine if the current salary structure is appropriate.

The Canadian context is sending mixed signals

The broader labour market helps explain the more measured outlook. Statistics Canada reported that employment declined by 42,000 in August 2026, while the unemployment rate held at 6.4%. Average hourly wage growth slowed to 2.0% year over year, its slowest pace since November 2017 outside the pandemic year of 2021. These figures point to less generalized wage pressure than employers faced during the tight post-pandemic labour markets.

Cost pressure has not disappeared, however. The Consumer Price Index rose 3.0% year over year in August 2026. The Bank of Canada’s July outlook described the Canadian economy as weak but improving, with growth expected to pick up and inflation projected to reduce toward 2%, while emphasizing that uncertainty remained elevated. Employers are therefore planning in an environment where wage growth is cooling, employee costs remain important and where business conditions can change quickly.

WCBC’s findings reflect that balance. Market competitiveness remains the leading influence on 2027 salary decisions. Company performance is much more of concern than it was in the prior year, and economic uncertainty is more likely to be ranked as a leading consideration. Employee retention and the availability of qualified talent remain relevant, but they are less dominant in the aggregate results. The implication is not that talent pressure has vanished. Instead, organizations are more likely to allocate additional dollars where justified by market exposure, performance or hard-to-fill skills.

Pay structures are becoming more visible

Legislative developments add another reason to review salary structures. As of January 1, 2026, Ontario’s Employment Standards Act requires disclosure of compensation or a compensation range in publicly advertised job postings. In British Columbia, provincially regulated employers have been required to include pay information in public job postings since 2023, and the province’s annual pay transparency reporting requirement expands at November 1, 2026 to include employers with 50 or more B.C. employees.

These requirements do more than change recruiting administration. Published ranges invite comparison by candidates and current employees, exposing possible inconsistent job evaluation, outdated salary structures and unexplained pay differences. WCBC survey participants also placed greater emphasis on pay equity adjustments in their 2027 salary decisions. In summary, these developments strengthen the case for reviewing salary ranges, internal relationships and market positioning before budgets become final.

Total rewards still carry significant weight

Base pay is only one part of the employee value proposition. Among WCBC’s survey participants, 85% offer flexible work arrangements, including work-from-home options. Enhanced group insurance and retirement benefits are offered by 80%, career development programs by 76%, and professional development or training allowances by 74%.

While these programs do not replace competitive salaries, they can make the overall package more relevant to employees and give organizations additional ways to respond when salary budgets are constrained. The strongest approach is to evaluate pay, benefits, flexibility and development together, while being clear about the workforce needs that each element is intended to address.

What employers should consider for 2027

• Use the 3.2% median as a market reference, not an automatic budget. Consider sector, location, employee group, ability-to-pay and current market position.
• Separate salary structure movement from individual salary increases. A 2.5% range adjustment and a 3.2% salary budget address different compensation considerations.
• Identify roles that require targeted action. National averages can conceal significant pressure in specific jobs, industries and regions.
• Review ranges and pay relationships before publishing them. Pay transparency makes defensible structures and consistent administration increasingly important.