Canada, U.S. salary increase to hold steady in 2026

• Anticipated recession or weaker financial results (actual or forecast) (38.9%)
• Concerns related to cost management (e.g., rising cost of supplies) (34.4%)
• Inflationary pressures (27.4%)

“While top-line budgets are generally holding steady, the real shift is happening beneath the surface: Organisations are being more deliberate about how they allocate pay, where they focus investment and what outcomes they expect to drive,” says Brittany Innes, director for rewards and data intelligence, WTW.

“Employers are no longer simply reacting to economic signals; they’re reimagining how to best support broader business goals despite uncertainty and using this moment to position themselves for what’s next.”

Canadians’ concerns about their personal finances have surged amid mounting economic uncertainty and market volatility, according to a previous report from BMO Financial Group.

Improving business outcomes

Organisations that view compensation as a critical tool for improving business outcomes are putting in significant effort to ensure their pay strategies are responsive, equitable and effective, notes Innes.

Rather than relying on a single tactic, most are taking a multi-pronged approach — balancing broad-based increases with targeted adjustments and comprehensive reviews.