Canada's bustling economy is driving up salary increases, with Albertans due to enjoy the largest boost, two new surveys suggest.

Canadians can expect an average salary increase of 3.6 per cent for 2006 and 3.7 per cent for 2007, according to the Canada Salary Increase Survey conducted by the human resources firm Hewitt Associates.

However, Alberta is outpacing the rest of the country with all-time high increases of 5.3 per cent for 2006 and 5.2 per cent for 2007, the survey found. Hewitt suggests that companies in the rest of the country will have a difficult time attracting and retaining employees.

"There aren't many employers that can even begin to compete with the salary increases being offered in Calgary," Keri Humber, a senior consultant with Hewitt, said in a release Tuesday.

The Hewitt survey, which polled 465 companies across the country, said that Vancouver salaries would increase by 3.7 per cent, while Montreal and Toronto expect raises of 3.5 per cent and 3.4 per cent respectively.

Humber said employers in other parts of the country will have to offer attractive incentive packages to remain competitive with Alberta companies.

Highest increases for mining, oil, gas

Similarly, the human resources consulting firm Morneau Sobeco suggested Alberta will enjoy the largest salary increases, with a slightly more modest 2007 forecast of 3.5 per cent for operation and production staff and 3.9 per cent for executives.

The Morneau Sobeco survey, which was released Thursday, also divided salary projections by industry and found that mining, oil and gas companies are slated to receive the highest average salary increases, ranging from 3.8 per cent for workers to 4.7 per cent for executives.

However, metal manufacturing companies, most of which are based in central Canada, have the lowest salary increase expectations. Workers are due to receive a 2.2 per cent increaseand executives are projected to see their salaries rise bythree per cent.

Both surveys said their results indicated Canadian companies will have to be aggressive with their recruitment, compensation and benefit packages in order to maintain staffing levels as the labour market shrinks with the gradual retirement of the baby boomer generation.

"Employees need to have a real understanding of the value of all elements of their compensation package, including benefits, time off, bonus, long-term incentives and perquisites," said Humber.

"Employers cannot afford to lose good people in this shrinking labour market simply because their employees feel they aren't being adequately paid."