By Yosie Saint-Cyr

1. According to Mercer’s 2009 Canadian Compensation Planning Survey, due to a tightening economy and labour market, employers plan to award average base pay increases of 3.8 percent in 2009, slightly less than the 4 per cent increase granted in 2008. Pay raises are significantly higher for employees in regions with high-performing industries.

Canadian employers in high-performing industries plan to grant salary increases that are about 40 percent higher. Oil and gas and natural resources are the highest, with projected pay increases of 5.4 and 4.2 per cent respectively for 2009. In contrast, durable manufacturing and transportation are expected to award less-than-average pay raises in 2009 at 3.4 per cent.

2. The Hay Group survey of Canadian employers revealed that while the national average is similar to last year, the regional values differ quite noticeably. Canada’s slowing economy is colliding with the war for talent to push the national average forecast for base salaries up by 3.7 per cent for 2009. Saskatchewan has unseated Alberta as the province with the highest salary adjustment, sitting at 5.1 per cent for 2009, compared to 4.9 per cent for Alberta. Atlantic Canada has shown the highest year-over-year increase at 3.5 percent, up one-half percentage point from last year. This reflects the need for these regions to attract and retain talent to fuel their commodity sectors.

Ontario and Quebec are forecasting lower adjustments than last year, coming in at 3.3 and 3.2 per cent respectively. Both provinces are feeling the pain of slumping manufacturing sectors, and have forecasts that are lower than Atlantic Canada for the first time in recent memory. British Columbia and Manitoba are pacing the national average, at 3.7 and 3.6 per cent, respectively.

By industry, the oil and gas sector is projecting the highest average salary increase, at 5.4 per cent; while mining is at 4.4 per cent; forest products, 2.4 per cent; retail, 3.1 per cent; and manufacturing, 3.3 per cent.

Details of the survey results will be released at a series of Hay Group breakfast briefings being held in major cities across Canada in September.

3. Compensation and benefits consultants Morneau Sobeco suggests that including promotions and special adjustments, the average raise increases to 4.1 per cent. Despite the uncertain economic climate, “the reality of an aging workforce and tight labour markets” means attracting and retaining workers is a key issue for the majority of Canadian employers, the company said in a news release. Canadians who receive fixed salaries can expect an average increase of 3.5 per cent in 2009.

Alberta, British Columbia and the Prairie provinces are above the national average, headed by Alberta with a predicted 4.8 per cent rise. Ontario, Quebec and the Atlantic region are below the average, with expected increases of 3.2 or 3.3 per cent.

Including promotions and adjustments, Alberta again heads the list with a 5.6 per cent jump, while every other region is over 4 per cent, except Ontario, at 3.8 per cent.

4. The annual Canadian 2008-09 salary survey from Watson Wyatt, a subsidiary of Watson Wyatt Worldwide Data Services, projects the overall Canadian base salary will increase for 2009 by 3.46 per cent. In a healthy economy, salary increase projections tend to be somewhat conservative; actual increases are typically higher than those forecast in the previous year. If the Canadian economy continues at its current pace-and there are no imminent signs of a dramatic downturn, according to Watson Wyatt-then actual 2009 increases are expected to be higher than projections provided during the survey collection period.

Alberta (excluding Calgary) employers are leading the way with anticipated base salary increases of 3.83 per cent for 2009, with Calgary employers predicting a 3.69 per cent increase. Employers in neighbouring Saskatchewan are projecting base salary increases of 3.5 per cent. While projections in these regions are slightly lower than increases actually granted in 2008, it’s likely that 2009 increases will exceed predictions, unless an unexpected downturn occurs.

Professional/business services firms anticipate the highest salary increases for the coming year. Employers in these firms are again projecting solid increases at 3.92 and 3.75 per cent, respectively. While specialist roles within finance continue to be competitive, the demand for talent within the engineering field-such as engineering consultants-is the driving force behind higher increases being granted within professional firms.

The following table summarizes overall base salary increases by region and major industry grouping:

These numbers are based on the 2008-09 Annual Canadian Salary Survey, available online through Watson Wyatt Data Services CompSource™ at wwds.com.

Yosie Saint-Cyr, LL.B., is managing editor at HRinfodesk.com–Canadian Payroll and Employment Law News. 

Originally published in HRinfodesk–Canadian Payroll and Employment Law News and Developments August 2008.

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