Posthaste: Salary growth set to outpace inflation in 2025, report says

Salary growth in Canada is projected to surpass inflation for the first time in four years, according to a new report from Telus Health.

Their annual Salary Projection Survey, which analyzed data from over 355 Canadian organizations across various industries, forecasts a 3.45 per cent increase in average base salaries for non-unionized workers in 2025. This outpaces the current inflation rate of two per cent.

“The continued demand for skilled talent is driving strong salary growth into 2025, even as inflationary pressures on employers ease,” said Guylaine Béliveau, national practice leader of compensation consulting at Telus Health, in a statement. “With inflation rates decreasing, employees could regain the purchasing power they've lost in recent years. This shift has the potential to significantly enhance financial wellbeing and workplace morale.”

The largest salary increases for 2025 are expected in industries that also led growth in 2024, including construction at 4.13 per cent, real estate at 3.92 per cent, and business services at 3.9 per cent. The lowest increase, at 2.75 per cent, is anticipated in public administration, replacing information technology at the bottom of the rankings.

The report also highlights regional differences in salary projections. British Columbia is expected to see a 3.6 per cent increase, followed by Alberta at 3.54 per cent and New Brunswick at 3.5 per cent. In contrast, Nova Scotia is projected to have the lowest salary growth at 2.94 per cent for both 2024 and 2025. Quebec, which had a strong 3.85 per cent growth in 2024, is expected to slow to 3.41 per cent in 2025.

However, competitive salaries alone may not be enough to attract and retain talent. Due to ongoing challenges in the labour market, 59 per cent of organizations are either implementing or planning to introduce programs aimed at improving financial wellbeing. These include healthcare initiatives, financial literacy education, and group registered retirement savings plans.

“In today’s changing job market, employees want more than just competitive pay. They’re seeking employers who provide comprehensive support for their financial, physical, and mental wellbeing,” said Philip Mullen, vice-president of employer solutions consulting at Telus Health.

“Organizations that collaborate with benefits administrators to create well-rounded packages — combining retirement planning, investments, and health services — are more likely to see better recruitment, retention, and productivity outcomes.”

In 2025, employers will continue to prioritize employee engagement and leadership development, while increasingly focusing on upskilling, training, and leadership development programs. Additionally, 74 per cent of companies are either exploring or seriously considering adopting artificial intelligence solutions to improve operational efficiency.