Bank of Canada sees artificial intelligence as an opportunity to boost productivity without a widespread wave of unemployment

Ottawa —
The Bank of Canada adopted an optimistic tone regarding the economic impact of artificial intelligence, considering that the expansion of its use could help address the productivity crisis facing the Canadian economy, without causing significant job losses.

New external Deputy Governor Michelle Alexopoulos said that artificial intelligence has the ability to raise output per hour worked, improve business competitiveness, increase wages, and reduce some costs for consumers.

She explained that the major economic benefits will depend on whether artificial intelligence becomes a general-purpose technology, similar to computers and the internet, so that its use spreads across various sectors and causes wide structural changes within the economy.

She pointed out that financial institutions and companies have already started recording productivity gains through automating routine tasks, allowing employees to focus on higher-value work.

Studies referenced by the bank also showed that the pace of AI adoption accelerated since 2022, with about 12% of Canadian companies using these technologies by 2025.

Alexopoulos said the bank expects some jobs to disappear due to technological transformation, but it also sees new jobs being created, while the nature of other jobs will change rather than disappear entirely.

Conversely, she warned that young people and workers in entry-level jobs, customer service, or programming may be the most vulnerable to the rapid shift toward automation and artificial intelligence.

This stance comes at a time when the Bank of Canada continues to warn about the country's weak productivity, a problem it previously described as an economic emergency requiring urgent action.

Alexopoulos confirmed that the bank has already begun to take some limited gains from artificial intelligence into account when preparing its economic forecasts and estimates of the economy’s capacity to grow without generating inflation.

She added that artificial intelligence does not make monetary policy decisions, but it is used within the bank to improve data analysis and economic forecasts, including more accurate estimates of inflation and economic activity.