OTTAWA - Canadian workers can expect to see far more modest pay increases this year as businesses cut back in response to the deepening economic crisis, a new survey shows.
The Conference Board of Canada says employers have shaved their projected salary increases to 2.9 per cent for non-unionized workers from 3.9 per cent a few months ago.
Projections for wage increases by unionized workers fell to a 2.7 per cent gain from 3.2 per cent in earlier forecasts.
Both are still better than the 0.7 per cent average inflation rate expected in 2009.
"The deteriorating financial and economic conditions are having an adverse effect on salary increases," said Prem Benimadhu, vice-president of governance and human resource management. "Projected average salary increases fell by a full percentage point in just a few months."
The Ottawa-based think-tank says the downward trend is expected to continue as the year goes on.
"Respondents are not optimistic about 2009," the Conference Board says of the 220 mostly large and medium-sized organizations surveyed in December and January.
"Our winter update shows that from the time the summer survey was conducted, the majority of respondents (61 per cent) have adjusted their 2009 salary increase projections down in response to the economic downturn."
After several years of robust growth, Canada's job market has cooled recently in tandem with deteriorating economic conditions that began after September.
In the last three months, Canada has seen over 210,000 net jobs disappear and the jobless rate has risen by more than a full percentage point to 7.2 per cent.
Some economists predict the Canadian jobless rate could approach nine per cent by the end of the year.
Sectors particularly hard hit are the automotive, forestry and mining industries, with heavily unionized workforces.
