As the economic environment improves in Canada, a greater proportion of organizations are planning to boost salaries next year, Watson Wyatt Data Services’ latest Salary Budget Survey Report reveals.

The report, based on the responses of more than 100 organizations in Canada, found that 92.2% of Canadian employers are budgeting to increase salaries in 2010, up sharply from 79.5% in 2009, and up slightly from 91.4% in 2008.

The average projected salary increase for 2010 is 3% for those granting increases, according to the report. This is down from an actual base salary increase of 3.7% in 2008, and is unchanged from a budgeted increase of 3% in 2009.

Watson Wyatt notes that Canada has not been immune to the global financial crisis, which has boosted unemployment and impacted many employers. As Canadian firms searched for ways to manage costs, the report found that 2009 salary increase budgets were trimmed up to 1% from forecasts made in 2008, with some employers implementing wage freezes for some, if not all employees.

In the year ahead, forecasted wage increases in the not-for-profit sector, at 3.8%, are notably higher than those projected for organizations in the for-profit sector, at 2.9%.

Workers in the durable manufacturing industry and the services industry are set to enjoy the highest wage increases in 2010, at 3.1%. This compares to a projected increase of 2.4% for workers in the non-durable manufacturing sector, 2.6% in the trade industry, and 2.8% in insurance.

Regionally, only minor differences exist in the salary expectations for the year ahead. Nova Scotia workers are set to see the smallest increase, at 2.8%, while Saskatchewan and Vancouver employees are expected to experience the biggest hike, at 3.1%.