Organizations in all Canadian provinces and territories are seeing a drop in their salary increase budgets for 2020, according to a new survey by WorldatWork.
Alberta and Saskatchewan (both dropping from 2.8 per cent to 2.3 per cent), the Northwest Territories (from 2.7 per cent to 2.1 per cent), Nunavut (from 2.7 per cent to 2.2 per cent) and Yukon (from 2.5 per cent to two per cent) saw the steepest falls during the 12-month period ending June 2020.
However, the survey found all provinces and territories expect to rebound in 2021, except for Nunavut and the Northwest Territories, which are both anticipating salary increase budgets will fall by another 0.1 percentage point, and Prince Edward Island, which is expecting to drop another 0.3 percentage points to 2.2 per cent.
For Canada as a whole, salary increase budgets fell from three per cent to 2.6 per cent. Notably, for the same period, Statistics Canada reported an unemployment rate of 12.3 per cent, which is 6.6 percentage points higher than for 2019 overall.
Many metropolitan areas also reported drops, with Hamilton, Ont. (down 0.7 percentage points to two per cent) and Quebec City (down 0.5 percentage points to 2.3 per cent) the worst off. However, the survey found all Canadian cities are expected to rebound in 2021.
“As the economy recovered following the financial collapse in 2008, we first saw a gradual rise in salary increase budgets, then a levelling off, but over the past two years with low unemployment rates and increased competition for talent, we saw a bigger jump in salary increase budgets,” said Sue Holloway, director of WorldatWork, in a press release. “Now, the sudden jolt of the pandemic has driven a higher percentage of organizations indicating a zero salary increase budget for 2020.”