AI's potential to boost Canada's GDP is significant, but adoption rates and trust issues pose hurdles
The discussion around Canada's lagging per capita output gained prominence in May.
Bank of Canada senior deputy governor Carolyn Rogers highlighted the “emergency” levels requiring policymakers' attention, as reported by Financial Post.
Proposed solutions since then have included job retraining investments, regulatory and tax certainty improvements for businesses, and increased competition across various industries.
One of the most promising proposals is accelerating AI adoption, a transformative technology. TD Bank's May report estimated generative AI could add up to eight percent to Canada’s GDP over the next decade if widely adopted.
The Conference Board of Canada study indicated AI could boost GDP by nearly two percent, with three-quarters of businesses using AI reporting increased competitiveness.
Alain Francq, director of innovation and technology at the Conference Board of Canada, emphasized the opportunity AI presents, “We have this generational opportunity right now and it’s really a call to action. I think the bells are ringing right now, that we have to find our place in the AI world.”
AI can streamline tasks, with Google LLC estimating it could save the average worker 100 hours annually.
Nick Romano, CEO, and co-founder of Deeplite, a Toronto-based AI company, noted AI's efficiency in translating complex research into internal marketing materials.
Gary Saarenvirta, CEO and founder of Daisy Intelligence, another Toronto-based AI company, highlighted AI's impact on retail, growing a retailer's total sales by five percent.
Despite these benefits, challenges remain. A Statistics Canada report in February found only one in ten businesses plans to use generative AI, placing Canada mid-pack among OECD countries.
Patrick Gill, senior director of the Business Data Lab at the Canadian Chamber of Commerce, noted large companies face significant challenges in technology adoption due to change management issues.
A global IPSOS poll revealed Canadians' nervousness about AI, ranking 29th out of 31 countries regarding the belief in its benefits.
Concerns about data privacy, security, and job disruption also contribute to hesitancy. The Future Skills Centre predicts 22 percent of jobs are at high risk of automation.
Romano acknowledged AI’s impact on job roles, emphasizing the need for education to leverage AI's benefits. Francq reiterated the importance of skills training investments for successful AI adoption.
Canada's productivity may continue to struggle until these challenges are addressed. The Bank of Canada highlighted the country’s lag in intellectual property, machinery, equipment investments, and skills training.
The Canadian Chamber of Commerce reported Canada's productivity growth at just 0.9 percent over the past decade. The International Monetary Fund predicts Canada’s GDP per capita will grow by 1.4 percent in 2024, compared to 2.1 percent for the US. AI adoption may be crucial for reversing these trends.
