AI could transform economy, but no evidence yet of widespread job losses, Bank of Canada says

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The Bank of Canada says there is no clear evidence to date that artificial intelligence has led to widespread job losses, but that further adoption of the technology could lead to permanent changes in the economy, including the replacement of certain roles by AI and benefits from productivity gains.

Michelle Alexopoulos, external deputy governor at the central bank, told a business audience in Ottawa on Wednesday that as AI continues to improve and more companies implement it, there could be wholesale changes to how the economy works.

“By lowering costs for businesses and improving efficiencies, AI could support higher wages, reduce prices for consumers and spur new investment,” she said, noting that the central bank has already seen evidence of “small productivity gains” from AI.

Ms. Alexopoulos added that the bank is monitoring employment data closely for signs that AI is having a material impact on the labour market.

“To be sure, some workers are already feeling the effects of AI,” she said, pointing to weak hiring in roles such as entry-level coding and customer service – jobs that tend to have a higher proportion of younger workers. Ms. Alexopoulos emphasized that the bank is aware that AI could disproportionately affect younger workers, but that it also has the potential to transform jobs and create new ones.

In her speech, Ms. Alexopoulos drew a comparison between AI and the introduction of computers to offices. Jobs for typists and switchboard operators were phased out, but “entire IT departments” were created, she noted, and ultimately computerization did not lead to fewer jobs.

Bank of Canada senior officials have commented on the labour market impact of AI only a handful of times in the past two years, each time concluding that it is still too early to assess the long-term impact the technology will have on shaping the employment landscape in Canada.

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A Statistics Canada study published in June, 2025, and cited by Ms. Alexopoulos in her speech, showed that almost 90 per cent of businesses that have adopted AI reported no effect on staffing levels. Roughly 4 per cent said that AI had in fact led to job creation, and approximately 6 per cent said they had decreased staffing levels because of AI.

But in a subsequent Statscan survey published last September, businesses said that they anticipate a more negative impact of AI on employment.

“AI is changing how tasks are done, but humans remain in control,” Ms. Alexopoulos said in her speech.

A survey of how consumers are using AI conducted by the bank in the first quarter of 2026 found that a majority of respondents use AI in the workplace to boost productivity rather than to automate entire workflows and replace workers. About 31 per cent, for example, said they use the technology to generate and edit content, while approximately 24 per cent said they use it to analyze data and code. Almost 37 per cent of survey respondents said that they did not use AI in their workplace.

Ms. Alexopoulous also noted that AI could help solve labour and demographic challenges. With proper training, she said, workers displaced by AI could fill job openings that arise from slower population growth and retirements.

AI is bound to have a positive effect on productivity, Ms. Alexopoulous said in her speech, noting that the bank has seen evidence that there is growing demand for workers with AI skills. “As more workers build up these skills, it should help hasten AI adoption and speed up productivity gains. These skills will be particularly important for youth entering the labour force and those in roles exposed to AI,” she said.

The potential impact of AI on economic growth, the labour market and financial system stability has become a major preoccupation of central banks around the world. If the widespread adoption of AI leads to a significant boost in productivity – economic output per worker – that could allow economies to grow faster without generating as much inflation. That could, theoretically, allow central bankers to keep interest rates lower.

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Incoming Federal Reserve chair Kevin Warsh has made arguments along these lines in recent months, as he has sought to align himself with U.S. President Donald Trump’s demands for lower interest rates.

Ms. Alexopoulos said that it’s too early to know for sure what the impact of AI will be on productivity and monetary policy. This will depend on whether AI becomes a general-purpose technology, like electricity or the internet, that fundamentally transforms the structure of the economy.

“If AI proves to be more of a run-of-the-mill innovation, then it won’t lead to massive productivity growth, and it won’t radically transform the economy,” Ms. Alexopoulos said.

“But if AI is a [general-purpose technology], the technology will keep improving, adoption will broaden, and new spillovers and uses will continue to emerge. Productivity will improve and jobs will be transformed. Stronger productivity will make businesses more competitive, leading to higher wages for workers, cost savings for consumers and less pressure on inflation.”

Central bankers are also paying close attention to the potential risks AI poses to the financial system. New powerful AI tools, such as Anthropic’s Claude Mythos model, have created concerns about cybersecurity in the banking system. And Ms. Alexopoulos pointed to concerns among some economists that hype around AI has led to overinvestment and overvaluation in AI-focused stocks.

“To put it simply, the Bank of Canada cares about AI because of its potential to significantly affect productivity, economic growth, employment and inflation. AI also has the potential to impact the financial system, creating both new efficiencies and new risks,” she said.