How artificial intelligence can boost Canadian productivity
OTTAWA, ON, Dec. 11, 2024 — Artificial intelligence promises to reinvigorate Canadian economic growth and productivity in unprecedented ways, according to a new report released today by the Public Policy Forum.
The report, titled Industrial Revolutionary: How artificial intelligence will fuel Canadian productivity and prosperity, makes a compelling case that AI heralds a transformative moment comparable to revolutionary eras fueled by the steam engine, electrification and the microchip. “Artificial intelligence is the only technology, existing or on the horizon, with the potential to reverse the decades-long decline in the rate of productivity growth,” writes report author Peter Nicholson, a PPF Fellow.
As Canadian labour productivity continues to decline, AI is showing promising potential in areas that include Canadian health care, manufacturing, education, financial services, government operations and energy transformation, Nicholson writes. The technology promises to boost productivity by processing complex information, optimizing supply chains, personalizing education and supporting critical decision-making processes.
Describing AI’s “super-human capacity,” Nicholson says it could “radically increase the productivity of the discovery process itself. This will ultimately be the most transformative impact of AI since it promises to increase the rate of productivity growth of the economy as a whole.”
Nicholson argues that Canada is well-positioned to navigate this complex new landscape, given “significant advantages” that include: a strong research ecosystem (“outstanding intellectual capital has branded Canada as a global leader while supporting a steady flow of superbly trained talent”); globally competitive AI companies (“Canada has already established a solid position in the still-emerging AI industry with pioneering companies like Kinaxis, Coveo, Element AI [since acquired by ServiceNow], BlueDot, Mindbridge and BenchSci, among many others”); and a strategic approach to AI development that balances innovation with careful governance (“the 2024 federal budget included $2.4 billion for several AI support initiatives, headlined by $2 billion for computing power needed to train and operate Canadian-based AI models.”)
The paper also argues that key elements of an industrial strategy for Canada would have to include regulatory development and harmonization, supporting high payoff sectors and government as a model user of AI.
However, the report notes recent Statistics Canada data that indicates few Canadian businesses are using generative AI tools, and cautions that “the impact of AI on Canada’s rate of productivity growth depends almost entirely on the extent and speed of uptake of applications by businesses and public sector entities.”
The paper also acknowledges the critical need for responsible development: “With great power also comes great risk. But the risk has to be accepted and managed because AI cannot be ‘unlearned.'”
“Will AI power a new era of productivity growth and material prosperity in Canada?” Nicholson asks. “Yes, it will. Only the precise trajectory, and especially the timing, remain to be discovered.”
About the author
Peter Nicholson is Chair of the Board of the Canadian Climate Institute and founding president of the Council of Canadian Academies, an organization that conducts expert panel studies of scientific issues related to public policy. He has also held senior positions in government, business, science and higher education, including as Deputy Chief of Staff, Policy in the Office of the Prime Minister of Canada and as Special Advisor to the Secretary-General of the OECD in Paris.
About PPF
The Public Policy Forum is a non-profit, non-partisan think tank that builds bridges among diverse participants in the policymaking process, feeding fresh ideas into policy discussions. We believe good policy is critical to making a better Canada — a country that is cohesive, prosperous and secure. Our members include a broad base of private, public, non-profit and Indigenous organizations who share insight on policy challenges and developments.
For more information, please contact:
Alison Uncles
Vice President, PPF Media and Communications
Public Policy Forum