Will your 2027 raise keep up with the cost of living? Most Canadians are looking at 3.1% to 3.3% — here’s how to push for more

“Employers are moving away from across-the-board raises, and only 4% plan to give everyone the same increase”, Marie-Pier Bedard, Division President of Operational Talent Solutions at Randstad Canada, told Money.ca.

“The workers who see meaningful gains will be the ones whose skills are hardest to replace”, she added.

Will a 3.2% raise keep up with inflation?

If your salary rises by 3.2% while consumer prices increase by 3.1%, your real wage gain is only about 0.1%.

On a $70,000 salary, a 3.2% increase adds $2,240 in gross annual income. After adjusting for 3.1% inflation, the improvement in purchasing power is roughly $70 a year.

September’s inflation rate isn’t a forecast for 2027, and household expenses may rise faster or slower than the overall CPI. Transportation prices, for example, were up 8.4% year over year in September, while shelter costs increased 1.8%.

“Several years of rising costs have added up, and a small gain on top of a higher baseline doesn’t feel like progress,” said Bedard.

Randstad’s research found that 36% of Canadian workers have taken on, or are looking for, a second job to ease financial pressure.

Employers are targeting raises rather than increasing pay across the board

According to the Randstad report, rather than offering uniform increases employers are directing budgets towards top performers and workers with specialized skills.

Bedard says the clearest premiums are going to people who can integrate AI into business systems and processes. Engineers, cloud architects and data analysts with those capabilities are among the workers earning above-market salaries. Specialized skills in AI governance, machine learning operations and cybersecurity are also attracting higher pay.

The demand extends beyond tech jobs, however. Certified tradespeople, including millwrights and heavy-duty mechanics, are in short supply across Western Canada’s energy, mining and infrastructure projects.

In the Greater Toronto Area, senior AI governance specialists can earn up to $307,100, while AI agent architects can earn up to $221,300, according to Randstad’s salary guide. These are specialized senior-level positions, but they illustrate the premiums attached to hard-to-find expertise.

How to make a stronger case for a bigger raise

If your employer is budgeting for a modest increase, simply pointing to inflation may not be enough. You’ll need to show why your contribution warrants more.

“Start by looking at market data,” Bedard says. “Salary guides and advertised pay ranges can help you understand where your compensation sits relative to your role, experience and location.”

Pay transparency requirements in British Columbia and Ontario are also making it easier for workers to see what employers are offering for comparable positions.

Bedard also points to pay compression as an opportunity for employees to revisit their compensation.

“Some employers are setting aside 2% to 2.6% of payroll to address situations where new hires are earning more than longer-serving employees,” she says. If you’ve been in the same position for several years, it may be worth finding out where your salary sits within the range.

Other steps can strengthen your case:

• Document your results. Bring examples of revenue generated, costs reduced, time saved or additional responsibilities taken on.
• Highlight new skills. Explain how additional qualifications or technical capabilities have helped you contribute more. Bedard specifically recommends highlighting how you’ve used AI or other tools to improve productivity.
• Make a specific request. Identify the salary you’re seeking and explain how you arrived at that figure.
• Time the conversation. Find out when compensation budgets are set. “Raise it before budgets are set, not after,” Bedard advised.

A bigger paycheque isn’t the only thing workers want

Work-life balance was the leading reason Canadians gave for staying with their employer, cited by 43% of workers, compared with 26% who pointed to pay and benefits.