25 Oct 2011

Canadian Salaries Increasing for 2012

World financial markets may be depressed, and economic woes may be continuing in the US and Europe but Canadian salaries will increase again next year according to The Conference Board of Canada.

The Conference Board of Canada released a report today which expects non-unionized salaries to raise by 3.1%.  Unionized employees on average will receive 1.5% in the public sector and 2.3% in the private sector.  The lower public sector rates are reflective of wage freeze policies adopted by provincial and federal government to address government debt levels.  Of the provinces Ontario is on the low end of increases expecting 2.7% on average.

StatsCan showed core inflation to have increased by 3.2% over a 12 month period Sep 2010 to Sep 2011 and it would be reasonable to expect roughly a 3% rate for 2012.

In real terms this means salaries will remain flat for 2012 on average and Ontario salaries will lose a bit to inflation in the coming year.  Public sector workers will notice a small loss in real terms however this likely brings balance to years where salary increases outstripped inflation.

In terms of the effect on the real estate market we won’t expect demand increases purely from increases in purchasing power due to real salary increases from Canadians.  From a global outlook Canada remains one of the most stable economies in the world and as such we can expect higher than normal investment which will likely continue to compensate for small fluctuations in Canadian salary changes.

Brian Hawrysh – Managing Director – Spring Realty Inc.

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