Bank of Canada Forecasts AI Will Boost Productivity Growth

The Bank of Canada reports that artificial intelligence is generating early productivity gains in the Canadian economy, particularly within the finance, insurance, health care, and information technology sectors. Michelle Alexopoulos, External Deputy Governor of the Bank of Canada, stated at a policy conference in Ottawa that while AI is automating routine tasks and analyzing data, these benefits are currently concentrated and will take time to reflect in broad national productivity data.

Alexopoulos noted that the central bank has found no evidence of widespread worker displacement. While acknowledging weak hiring for entry-level coding and customer service roles, she compared the current transition to the introduction of computers, suggesting AI will transform jobs rather than eliminate them. She urged workers and youth to develop AI skills to meet evolving demand.

Governor Tiff Macklem announced that the central bank has revised its productivity growth outlook upward due to increasing AI deployment. Despite this optimism, a significant gap persists between Canada and the United States, where productivity grew by 2.9% in the first quarter of 2026 compared to Canada's 1.1% year-over-year growth in 2025. Nathan Janzen of the Royal Bank of Canada cautioned that AI alone cannot resolve Canada's structural productivity issues, such as regulatory hurdles and weak business investment.