Our latest survey has revealed a worrying reality for many Canadians: paycheques have barely budged in five years, while the cost of everyday life has risen.
Out of the 1,208 Canadians surveyed:
- 59.1% haven’t received a pay rise since 2020
- 71.9% said their salary hasn’t kept up with inflation
- 87% said their wages are falling behind the rising cost of living
Even those who have seen their pay increase report that rising prices have erased any benefit, leaving them no better off than before. For many, the result is growing credit balances, missed savings goals, and turning to debt relief solutions to regain control over their finances.
In this blog, we’ll look at why Canadian wages aren’t keeping pace with rising living costs and what the data tells us about the financial pressures people are facing.
Jump to:
- The gap is widening between wages and living costs
- What do the numbers say?
- Why does wage growth fall?
- How do falling wages impact households?
- Take your first step to financial freedom
- About the survey
The gap is widening between wages and living costs
Over the past five years, the cost of essentials such as groceries, rent, utilities, and transport has risen sharply. Wages, on the other hand, have failed to keep pace. With nearly 9 in 10 people saying their salaries can’t match the rising cost of living, the problem is often clearly systemic rather than personal. For many households, this has meant rising credit card balances, shrinking savings, and a growing need to explore debt relief options as they try to get their finances back on track.
What do the numbers say?
Figures from Statistics Canada show why so many Canadians are feeling squeezed. In 2023, wages only grew by 1.1% after inflation, but the cost of living jumped by 3.9%.
Yes, wages did climb about 5% into early 2024, but prices had already eaten away at people’s budgets. It wasn’t until later in the year that wages finally pulled ahead—by just 3%. For many households, the damage was already done: higher bills, less money to save, dipping into credit cards, and more stress about the future.
Why does wage growth fall?
There are several reasons why wages struggle to keep up with living costs:
- Rapid inflation spikes: Prices for everyday items have increased faster than many employers can adjust salaries, especially after the pandemic and global supply chain disruptions.
- Slower wage negotiations: In some sectors, annual pay reviews have been frozen or delayed, meaning workers go years without meaningful increases.
- Economic uncertainty: Employers facing higher costs themselves – from energy to materials – have been reluctant to commit to substantial pay rises.
- Regional differences: Some provinces face higher living costs without the wage levels seen in major urban centres, widening the gap further.
Together, these factors mean even small pay rises have been outpaced by the cost of essentials, leaving families struggling to maintain the same standard of living.
How do falling wages impact households?
One of the most fundamental ways that falling wages can impact households is by relying more and more on emergency funds or credit to get by.
According to Equifax Canada, cardholders in 2023 carried over $4,300 in credit card debt, the highest level since 2007, and a high cost of living at the time contributed to 1 in 23 consumers missing a payment. As a result of this, mental health can also take a toll, as people work harder than ever but feel as though they are just falling further behind.
Take your first step to financial freedom
When your pay isn’t keeping pace with the cost of living, even small expenses can add up fast. Missed savings goals, growing credit card balances, and rising stress are all too common. At Harris & Partners, we offer consumer proposals and other debt management options designed to stop interest, lower payments, and help you get back on track. Book your free consultation now to speak to a member of the team.
About the survey
This survey was conducted by Harris & Partners in August 2025 and includes responses from 1,210 Canadians aged 18 and older. It explored how financial pressures, wage trends, and economic instability are affecting Canadians’ well-being and daily decisions.
