Excuses, excuses: Most workers skeptical when employers cite economy for lack of raises – and 3 in 4 say annual increases no longer the norm
Human resources professionals could be facing some disgruntled employees, judging by the results of a new survey.
H&R Block Canada reports that 60 per cent of working Canadians received a pay increase in the past 12 months, with an average raise of 4.3 per cent. Among those who received an increase, men reported an average 4.9 per cent rise compared with 3.7 per cent for women.
Nearly one‑third (29 per cent) have not received an increase and do not expect one in the next six months.
No raises? Excuses, excuses
Reactions to pay rises are mixed. Of those who received a raise, 35 per cent say they were happy with the amount and 38 per cent felt neutral, while 21 per cent were disappointed it was not higher and six per cent say they were offended by the size of the increase.
Many respondents expressed strong scepticism about how employers justify pay decisions: 90 per cent say employers “often use the excuse of it being a challenging economic time” to justify not providing pay increases.
Seventy‑four per cent believe annual increases are no longer the norm, and 83 per cent say employers do not give pay increases as much in today’s environment because they are focused on profits rather than retaining employees over the long term.
Two‑thirds (67 per cent) say employers are often biased in giving increases to employees they like the most, finds H&R Block.
Canadians are bracing for a tougher financial year in 2026, with large majorities expecting the cost of living, housing affordability and the broader economy to deteriorate, according to a recent report.
Pay levels link to engagement, retention
Pay is closely tied to effort and engagement. The H&R Block Canada survey found 63 per cent of working Canadians say they would be more motivated to work harder if they were paid more, while 44 per cent say frustration with their pay makes them less willing to work harder. This sentiment is strongest among younger workers aged 18 to 34 (47 per cent), compared with 38 per cent for those aged 35 to 54 and 27 per cent for those 55 and older.
Meanwhile, more than four in 10 Canadians (43 per cent) say their salary makes them feel undervalued by their employer, and 30 per cent say that unless they receive a pay increase, they will look for a new job in the next 12 months. Among workers aged 18 to 34, that figure rises to 39 per cent, compared with 29 per cent of those aged 35 to 54 and 16 per cent of those 55 and over.
Government workers in Ontario and British Columbia earned significantly higher wages and enjoyed more generous benefits than comparable private‑sector employees in 2024, according to two previous studies from the Fraser Institute.
Cost of living, burnout, motivation
Seventy per cent of working Canadians say their income does not reflect today’s high cost of living, finds H&R Block Canada’s survey.
More than a third (35 per cent) report they cannot stretch their paycheque to the next paycheque and often rely on credit cards, overdrafts or bridging loans. The breakdown by province:
- Alberta, Saskatchewan and Manitoba (42 per cent)
- Quebec (39 per cent)
- Atlantic Canada (36 per cent)
- Ontario (31 per cent)
- British Columbia (28 per cent).
While nearly two‑thirds (64 per cent) of working Canadians say they love their job,, another 71 per cent feel employers have less focus on work-life balance today.
Another 50 per cent report feeling burnt out, and 58 per cent say they sometimes have job remorse, regretting that they did not take a different career path.
Lack of pay transparency
Nearly half of working Canadians say they are as private about their income as they are about their nudity, according to H&R Block Canada.
The national survey of 1,545 Canadians in February found 46 per cent of working respondents are as guarded about their salary as their nudity, while 44 per cent say they try to find out what their peers earn to assess whether their own income is fair.
On average, Canadians believe nearly $85,000 is the annual income a single adult needs to “get by and put a little aside into savings or for an emergency fund.” That perceived threshold breaks down by province to:
- $93,000 in British Columbia
- $89,000 in Alberta and $87,000 in Ontario
- $82,000 in Saskatchewan and Manitoba
- $76,000 in Atlantic Canada and Quebec.
Meanwhile, pay transparency rules are forcing employers to overhaul compensation structures, tighten internal equity, and rethink how they hire – and HR leaders who fail to adapt risk damaging trust, culture, and talent pipelines.
