Canadian Weekly Earnings Up 3.5% in March as Payroll Employment Dips

Average weekly earnings across Canada rose to $1,333.23 in March, representing a 3.5% increase from the same time a year earlier, according to fresh data released Thursday by Statistics Canada. While this indicates wage growth is outpacing current inflation levels, the broader job market data suggests a more restrictive hiring environment for workers navigating the elevated cost of living.

The earnings growth is the brightest spot in a labor market report that otherwise points to a slow cooling phase. Statistics Canada noted that the number of employees receiving pay and benefits—measured as payroll employment—edged down by 31,800 positions in March. That is a minor 0.2% drop, but it brings the cumulative decline since February to nearly 70,000. Year-over-year, payroll employment remains up by a very slight 0.1%.

The sector-level breakdown shows where the pressure is building. Payroll employment in accommodation and food services fell for a second straight month, dropping by 7,000 positions, while construction shed 4,100 roles. Retail trade also continued a broader downward trend, losing 3,600 positions in March. On the flip side, public administration added 4,300 roles.

For job seekers, the landscape is stabilizing rather than sharply deteriorating. Job vacancies held steady at 500,300 in March. That figure is down 3.2% from a year ago—a much milder decline than the steep 13.7% drop recorded between March 2024 and March 2025. The national job vacancy rate remained unchanged from February at 2.8%, leaving roughly 3.0 unemployed persons for every vacant position.

What it means for households

The 3.5% aggregate pace of earnings growth indicates upward momentum in wages relative to inflation. However, this average does not equate to a universal 3.5% raise across the board, as sector composition and hours worked heavily influence the top-line figure. Households should note that while purchasing power is generally improving, individual outcomes depend heavily on industry and job stability.

However, the decline in payroll employment in sectors like retail and food services suggests workers may face a more competitive job-switching environment than during the tighter labor market of recent years. While mass layoffs are not sweeping the economy, businesses are becoming more selective about hiring and replacing staff who leave. Employees looking to negotiate raises or change jobs will likely find a more competitive environment than they did two years ago.

What to watch next

The Bank of Canada closely monitors wage growth as a key metric for domestic inflation pressures. While a 3.5% earnings increase is a win for workers, it remains near the upper bound of what the central bank prefers to see alongside its 2% inflation target. Policymakers will be watching to see if a cooling hiring market naturally decelerates wage growth in the coming months.

For households, the next checkpoint will be the upcoming Bank of Canada interest rate decision on June 10, alongside the release of May employment figures. Policymakers will use this data to determine if current borrowing conditions are still necessary to manage domestic demand, directly impacting mortgage renewals and consumer debt costs in the near term.