Federal Pay Raises vs Inflation: Are Public Servants Keeping Up? (2020–2026)
This one is personal. I joined the federal public service in 2021, right as inflation was taking off. My grocery bills went up 20%. My rent went up. Meanwhile, my collective agreement raise was 1.5%. The retro pay cheque was nice when it finally arrived — but it didn't change the math. I wanted to know: did my purchasing power actually go down?
So I pulled the salary history for every major classification group in FedPay's database and compared the cumulative raises to Statistics Canada's CPI data. The answer, for most groups, is not great. Track your own classification using the raise history tool.
The Short Answer: No
Most federal classification groups saw their real purchasing power decline between 2020 and 2024. While nominal salaries went up, they didn't keep pace with inflation.
| Group | 2020 Salary | 2024 Salary | Cumulative Raise | CPI Inflation | Real Change |
|---|---|---|---|---|---|
| PA (AS, PM, CR) | $54,878 | $61,786 | 12.6% | 18.2% | -5.6% |
| EC | $55,302 | $62,871 | 13.7% | 18.2% | -4.5% |
| IT | $70,439 | $80,366 | 14.1% | 18.2% | -4.1% |
| FI | $59,211 | $66,982 | 13.1% | 18.2% | -5.1% |
| EX | $121,490 | $137,524 | 13.2% | 18.2% | -5.0% |
Every major classification group lost purchasing power. The PA group (AS, PM, CR) fared the worst with a real decline of -5.6%, while IT and EC groups did slightly better but still fell behind.
Year-by-Year: What Happened
| Year | CPI Inflation |
|---|---|
| 2020 | 0.7% |
| 2021 | 3.4% |
| 2022 | 6.8% |
| 2023 | 3.9% |
| 2024 | 2.5% |
2020: The pandemic year
Inflation was historically low at 0.7%. Most collective agreements provided modest increases in the 1–2% range, so federal employees actually gained purchasing power this year. But this would be short-lived.
2021–2022: The inflation spike
CPI surged to 3.4% in 2021 and a staggering 6.8% in 2022 — the highest rate in over 30 years. Meanwhile, most collective agreements had been negotiated before the spike and provided raises of only 1.5–2.8% per year. The gap between pay raises and inflation widened dramatically.
2023–2024: Partial recovery
New collective agreements were signed with larger retroactive increases (many groups received 4.75% for 2022 and 3.5% for 2023). This helped close the gap, but the cumulative damage from 2021–2022 was too large to fully offset. Inflation moderated to 3.9% in 2023 and 2.5% in 2024, but the compounding effect means prices are still 18.2% higher than 2020.
What This Means in Dollar Terms
For an AS-01 at step 1, the real-world impact looks like this:
- 2020 salary: $54,878
- 2024 salary: $61,786 (nominal increase of $6,908)
- 2020 salary adjusted for inflation: $64,866 (what you'd need to maintain purchasing power)
- Gap: $3,080 less purchasing power per year
In practical terms: the same groceries, rent, and gas that cost you X in 2020 now cost18.2% more, but your salary only grew 12.6%.
How Does the Federal Government Compare to the Private Sector?
According to Statistics Canada, average weekly earnings across all industries grew approximately 15–17% from 2020 to 2024 — slightly better than most federal groups. However, federal employees benefit from:
- A defined benefit pension (worth an estimated 20–25% of salary)
- Job security (layoffs are extremely rare)
- Retroactive pay when agreements are finally signed
- Generous leave entitlements (vacation, sick, family-related)
When total compensation is considered (not just salary), federal employees are still generally competitive with the private sector — though the salary gap is a sore point, especially for higher-demand groups like IT where private sector salaries have surged.
What's Coming Next?
Several collective agreements are currently being negotiated or recently ratified for the 2025–2028 period. Unions are pushing for larger economic increases to compensate for the inflation gap. Whether these negotiations will fully restore purchasing power remains to be seen.
FedPay will update salary data as new agreements are signed. In the meantime, you can:
- Track your raise history vs. inflation for your specific classification
- Look up current pay rates for any classification and level
- Calculate your take-home pay to see what you actually keep after deductions