Salary Freezes Forecast To Persist In 2021

Canadians shouldn’t expect a pay raise in the next year.

Human resources consulting firm Morneau Shepell says 13% of the 889 organizations it monitors say they plan to freeze salaries in 2021. That's far more than last year's pre-COVID-19 survey, which found that only 2% of organizations would freeze salaries in 2020.

As things turned out, Morneau Shepell later determined that 36% of organizations actually froze salaries in 2020 because of the economic impact of the global pandemic.

Morneau Shepell estimates the average salary increase in 2020 will be about 1.6% including freezes, down from a 2.4% average increase in 2019 and the first time since 2008 that the increase was below 2%.

The company says Alberta has been hardest hit this year, with average base salaries up only 1.4% if salary freezes are included, and the province is expected to lag other parts of the country again in 2021. On a national scale, the projected 2021 salary increase including salary freezes is 1.9%, with Alberta's increase projected to be 1.7%.