AI is not adding to Canada’s GDP like it is in the U.S., new analysis says - Global News
As Canada continues to ramp up investment in artificial intelligence, the effects on the country’s GDP remain net neutral, new analysis says. But long-term productivity gains are still possible.
Analysis from Royal Bank of Canada (RBC) economists says they don’t expect rising AI investments to add to Canada’s GDP growth in the same way as in the United States.
Claire Fan, a senior economist with RBC, said Canada is beginning to invest more in AI infrastructure, but those investments are being made in computer and peripheral equipment made in other countries.
Over the first half of 2026, these purchases surged 28 per cent, according to national accounts data.
However, Fan said imports of computer and peripheral equipment are up 75 per cent from one year ago.
“We are a little bit behind. Canadian businesses are adopting at a slower pace than American businesses,” Joël Blit, an economics professor at the University of Waterloo as well as co-founder and co-director of the Canadian AI Adoption Centre, told Global News.
While Blit said he agrees that investments into AI infrastructure are directly benefitting the economies that produce them, not Canada’s, he said that is not the most important question economists should be asking.
“Productivity, I expect, is gonna rise significantly,” he said. “But that is going to take a little bit longer because you need to make these investments and then they have to work their way through until you can actually produce in these new ways with this new technology.”
Blit studies disruptive technologies which include things like electricity, computers and the internet. He said the first stage involves inserting the new technology into the current workflow as a direct replacement.
“An example of that might be a human computer was a person who sat at desks all day and did arithmetic for a living. Well, you were still doing everything the same way you always did, but now instead of asking the person to do that arithmetic, you go and ask the computer,” he said.
This only improves productivity slightly, he said.
He said real gains come when people “reimagine how they do their business.”
“Barnes and Noble used the internet to better track inventories, to help people find books on shelves. But Amazon re-imagined the book-selling industry as a whole,” he said.
But in order for that kind of reimagination to be possible, Blit said complimentary investments are needed.
“You also have to retrain people and you may need to re-engineer your processes to take full advantage of the new technology,” he said.
Public opinion polling shows that the majority of Canadians hold a negative view of AI.
Data from Angus Reid collected in the first half of the year shows 43 per cent of Canadians view AI negatively and 24 per cent are critical of it.
Despite the negative perceptions, Canadians are still using AI. The same survey found that 41 per cent of Canadians use AI more than once per week, compared to 30 per cent who don’t use AI at all.
Blit said this individual use could help Canada in the long run as much of the adoption in businesses is not coming “top down.”
“A lot of what’s happening in organizations is not that the head boss is saying, ‘hey, let’s adopt this technology’. It’s that if they provide the guardrail, if they provide access to the technology and the guardrails, people are gonna use them,” he said.
Fan said Canada has had “lackluster” productivity growth, with GDP increasing just over one per cent in the last year, but that could increase with AI. Blit said this emphasizes the importance of increasing AI literacy and exploration.
“It’s so important for us as a country to invest in AI literacy so that we can empower as many Canadians as possible to experiment and find ways to use these tools,” he said.
