At a time when unemployment is at near record lows, many sectors are struggling to find talent – and after a recent spike in inflation, too, it may seem like an opportune time to ask for a raise. But on the flip side, many firms have recently cut staff and the Canadian economy has begun to cool.
Such seemingly opposing market signals can make it difficult for Canadians to discern how much power they have at the bargaining table. While inflation adds pressure to negotiate for more, experts warn that asking for too much could backfire. That’s because in an uncertain economy employers may be more inclined to take a second or third-choice candidate who doesn’t demand as much money, while existing staff who negotiate for higher pay could be targeted in future layoffs if they fail to adequately prove their worth.
“This is where the confusion is happening, because on one hand people are confident and seeing robust opportunities out there, but at the same time companies are seeing [economic] pressures,” says Mike Shekhtman, regional director at staffing services firm Robert Half Canada.
According to a recent survey by Robert Half Canada, 83 per cent of workers are concerned about rising costs and interest rates, and 73 per cent are worried about the economy more broadly. At the same time only 42 per cent are concerned about their job security. As a result, 70 per cent are looking for a salary increase in 2023.
“As the job market becomes more balanced, being the same level of aggressive as you might have been nine months ago comes with a much higher risk,” says Andres Lares, the managing partner of Baltimore-based Shapiro Negotiations Institute, which provides negotiation training to Fortune 500 companies, professional athletes and sales teams. “You can still negotiate, but you need to be a little more prepared. You’ve got to be a little more strategic and you may want to be a bit less aggressive, unless you’ve got a lot of alternatives.”
Mr. Lares says as power shifts from the employees’ side, owing to the tight labour market, to a more balancedposition between employer and employee, it becomes more important to come to salary negotiations well prepared. Specifically, he recommends engaging in a thorough examination of the job market and even seeking competitive offers.
“If you’d like to negotiate you might go out of your way to apply for a few other jobs that you might not want as much, but you think you’ll have a good chance of getting,” he says. “If nothing else, you can feel more confident having more alternatives, and that confidence will likely give you a better outcome.”
Those seeking higher compensation in this economy will need to justify their worth, says Mr. Lares, who advises not to wait until the subject of compensation arises to start communicating value.
“Negotiating doesn’t start when there’s an offer on the table, or the moment you talk about compensation directly; it’s part of the entire process,” he says. “You need to communicate why you’re worth more than the next candidate who wouldn’t require more money.”
Part of that preparation should also include a study of the employer’s performance and current financial standing, advises career coach Miriam Groom, the chief executive officer of Mindful Career. She says even in the worst economic climates, certain sectors, employers and roles remain in high demand, and it’s up to negotiators to determine just how strapped the other party really is.
“If they are increasing their prices and are not bringing that back to the employees then there’s an issue there,” she says. “If you’re at a large service firm – a lot of them are cutting costs, because they’re unable to close as much business – so if that’s happening, you know the kind of response you’ll get if you ask for a raise.”
Ms. Groom recommends expanding the scope of the negotiation beyond salary. Specifically, she says now is an opportune time to negotiate for perks that can save workers money today or help them earn more in the future at relatively little cost to their employers.
“You have to think about a lot of other things that are tied to [compensation], rather than the base number, because if someone requires you to get a car and go into work with the gas prices through the roof, you might make the same amount [working remotely at a lower salary level],” she said.
According to the Robert Half Canada survey, salary flexibility is the most desired non-salary perk, followed by job stability, positive work relationships, recognition and development opportunities. In fact, a previous Robert Half survey found that a quarter of Canadians would take a pay cut in order to work remotely full time, and another found that among Canadians who plan to switch jobs in 2023, career advancement was a primary motivator for 30 per cent.
“A lot of companies, they just can’t afford to raise salaries right now,” says Ms. Groom, “so consider the other things you can negotiate for.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
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