A slower adoption of artificial intelligence has had a net-neutral effect on Canada’s GDP, new analysis says.
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analysis → have → GDP
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.
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investments → say → 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.
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investments → say → countries
Over the first half of 2026, these purchases surged 28 per cent, according to national accounts data.
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purchases → surge → data
However, Fan said 75 per cent of this equipment is imported from outside of Canada.
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cent → say → Canada
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.
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Blit → adopt → 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.
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economists → say → them
“Productivity, I expect, is gonna rise significantly,” he said.
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he → expect → ?
“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.
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you → go → technology
Blit studies disruptive technologies which include things like electricity, computers and the internet.
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which → study → electricity
He said the first stage involves inserting the new technology into the current workflow as a direct replacement.
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stage → say → 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.
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who → sit → 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.
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he → do → computer
This only improves productivity slightly, he said.
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he → improve → productivity
He said real gains come when people “reimagine how they do their business.”
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they → say → business
“Barnes and Noble used the internet to better track inventories, to help people find books on shelves.
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people → use → shelves
But Amazon re-imagined the book-selling industry as a whole,” he said.
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he → re → whole
But in order for that kind of reimagination to be possible, Blit said complimentary investments are needed.
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investments → say → reimagination
“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.
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he → have → technology
Public opinion polling shows that the majority of Canadians hold a negative view of AI.
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majority → show → 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.
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cent → collect → it
Despite the negative perceptions, Canadians are still using AI.
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Canadians → use → 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.
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who → find → AI
Blit said this individual use could help Canada in the long run as much of the adoption in businesses is not coming “top down.”
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much → say → businesses
“A lot of what’s happening in organizations is not that the head boss is saying, ‘hey, let’s adopt this technology’.
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’s → happen → 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.
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he → ’ → them
Fan said AI investments over the past year have amounted to just over one per cent of GDP per hour worked.
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investments → say → hour
But Blit said this emphasizes the importance of increasing AI literacy and exploration.
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this → say → literacy
“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.
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he → ’ → tools
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