Employees in Canada's booming commodities sectors are poised to win the pay race next year with salary gains forecast to be well above the national average.
A survey of 660 Canadian employers by consulting firm Hay Group found companies expect to see wages climb 2.8 per cent on average across their work force in 2012, with salary gains of 3.8 per cent in the booming mining sector and 3.7 per cent in the oil and gas field.
"The high-paid sectors of mining and oil and gas are a percentage point higher [than the average], and the low-forecast sectors of government and health care are a percentage point lower [than average]," said Karl Aboud, director of the Canadian Reward Practice at Hay Group.
Mr. Aboud said employees at mining and energy companies have a "triple advantage" because their industries are earning good profits, the job market is tight, and companies can more easily afford wage increases because salaries are not typically their highest category of expense.
"Those sectors are capital intensive, not labour intensive," Mr. Aboud said. "To them, the biggest items are not their labour costs, as it would be for government or retail or other more labour-intensive industries."
On a provincial basis, Alberta and Newfoundland are expected to lead Canada with forecast wage increases of 3.4 per cent, followed by Saskatchewan at 3.2 per cent. All three provinces have strong energy and mining sectors, and a Manpower Canada survey in June showed Alberta's oil patch leading national hiring of new out-of-province workers due to booming demand.
The rest of Atlantic Canada is expected to lag the national average with wage growth of 2.4 per cent, while B.C. and Manitoba are forecast to see growth of 2.5 per cent. Wage growth is pegged at 2.7 per cent in Ontario and 2.8 per cent in Quebec.
The national forecast of 2.8 per cent in 2012 compares to salary growth of 2.7 per cent in 2011.
Mr. Aboud said the survey shows companies are "fairly optimistic" about progress in 2012, but are also more cautious than they were prior to the downturn in late 2008. In mid-2008, for example, companies were forecasting wage growth of 3.7 per cent the following year, which turned into actual wage increases of 2.25 per cent by the end of 2009.
"When people felt good three years ago, it meant almost a 4-per-cent increase. Nowadays feeling good means almost a 3-per-cent increase," Mr. Aboud said. "So the definition of 'feeling good' is a bit weaker these days."
The survey was done in June and July, prior to the recent market downturn, but Mr. Aboud said the salary growth projections are fairly conservative, so are probably still within a realistic range.
With inflation currently running at about 2.7 per cent, the forecast wage increases would not provide much increase in purchasing power for workers, Mr. Aboud said, although core inflation – excluding food and energy – was just 1.2 per cent in July.
The sectors with the lowest wage projections for 2012 are health care at 1.3 per cent, forestry at 2.3 per cent and retail at 2.3 per cent. Banks and credit unions are forecasting stronger wage growth at 3.2 per cent in 2012.
Janet McFarland