Industries with the Highest Labor Costs in Canada in 2025

• 1. Commercial Banking in Canada

  Labor Costs for 2025: $48.6B

  The high interest rate environment experienced over the five years to 2025, along with overall economic growth, has benefitted the Commercial Banking industry in Canada. Banks have done an exceptional job diversifying revenue streams, due to higher interest rates and increasing regulations. The industry primarily generates revenue through interest income sources, such as business loans and mortgages, but it also generates income through noninterest sources, which include fees on a variety of ...

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• 2. IT Consulting in Canada

  Labor Costs for 2025: $48.0B

  The rapid pace of technological change propelled the IT Consulting industry in Canada, with the prevalence of cloud-based services, mobile apps and other cutting-edge software fueling spending across the economy. The advent of artificial intelligence (AI) technology joins the long list of cutting-edge trends fueling need for IT consultants across various sectors. The Canadian government is simultaneously bolstering the industry with its large-scale investments, announcing a $2.0 billion inves...

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• 3. Hospitals in Canada

  Labor Costs for 2025: $46.2B

  Hospitals play a critical role in healthcare delivery across Canada, serving as the primary providers of specialized and emergency medical services. These facilities treat patients regardless of economic circumstances, but income growth coupled with universal insurance coverage has made elective care more accessible to a wider population. Years of steady growth were interrupted by the COVID-19 pandemic, as the pandemic’s sudden impact left hospitals grappling with unprecedented challenges to ...

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• 4. Colleges & Universities in Canada

  Labor Costs for 2025: $24.7B

  The primary funding sources for colleges and universities in Canada have significantly shifted over the past five years. Provincial government funds historically made up the most significant revenue stream for universities, but lacklustre growth in per-student funding has pushed universities in most provinces to rely more on higher tuition fees. The recent influx of international students has proven lucrative for postsecondary institutions, but a temporary cap on international study permits h...

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• 5. Engineering Services in Canada

  Labor Costs for 2025: $17.9B

  Canadian engineering services have navigated a tumultuous yet resilient period, facing challenges from fluctuating commodity prices and rapid technological competition. In recent years, engineering firms have heavily depended on the resource extraction industries, concentrated in Alberta, accounting for nearly a quarter of industry revenue. These sectors faced contractions in 2020 and 2023 when oil and commodity prices fell, postponing crucial projects and hindering revenue. However, as Canad...

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• 6. Full-Service Restaurants in Canada

  Labor Costs for 2025: $16.3B

  Full-service restaurants in Canada thrived from the pandemic low, driven mainly by rising levels of consumer spending. However, the unwelcome high inflationary pressure following the pandemic has reduced customers' propensity to dine out as menu inflation surpassed food inflation. As a result, soaring operational costs and lower consumer interest in dining out have suppressed the industry's overall growth. Nonetheless, industry revenue has expanded an annualized 10.8% t...

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• 7. Sporting Goods Stores in Canada

  Labor Costs for 2025: $15.9B

  Sporting goods stores withstood challenges from intense competition, while sales of bicycles, camping equipment, exercise and fitness equipment, apparel and footwear have climbed. The industry withstood the pandemic, rebounding because of strong per capita disposable income growth and renewed interest in pursuing athletic hobbies. Nonetheless, the pandemic contributed to a challenging retail environment that boosted competition from discount department stores and e-commerce sites, which can o...

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• 8. Pharmacies & Drug Stores in Canada

  Labor Costs for 2025: $13.3B

  Canadian pharmacies and drug stores have been experiencing moderate volatility. Drug stores have benefitted from growing health-related expenditures, with prescription medications remaining popular among consumers. Although increasing pharmaceutical prices have bolstered revenue, many provincial drug programs restricted prescription prices to cut healthcare costs, requiring generic drugs to be marked down by a percentage of the patented drug equivalent, which limits revenue growth and prevent...

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• 9. Supermarkets & Grocery Stores in Canada

  Labor Costs for 2025: $13.1B

  Supermarkets and grocery stores have endured a transformative journey since 2019, shaped by the pandemic, geopolitical tensions and an ever-changing market landscape. Grocers first encountered unprecedented demand as lockdowns redirected consumers' spending from entertainment to at-home essentials. Sales spiked, but the boom was fleeting; by 2021, factors like declining disposable income and soaring food prices reversed the trend. Even post-pandemic, the industry is evolving—more consumers th...

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• 10. New Car Dealers in Canada

  Labor Costs for 2025: $11.7B

  New car dealers have been riding out a period of disruption and adaptation, facing headwinds and finding new growth paths. Dealer performance has shown signs of rebound lately, as stabilizing interest rates started to unlock pent-up demand among everyday buyers and commercial clients. While consumer confidence hasn’t fully recovered, the slight easing in financing costs and some improvement in disposable incomes have helped keep the wheels turning for the Canadian auto retail sector. Dealers,...

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