Yahoo Finance Canada must embrace AI or face 'major loss of prosperity': Desjardins
'Transformative' potential in reach, but current adoption 'uneven and relatively slow'
Canada has potential to be a global leader in a future economy shaped by artificial intelligence, but missteps and hesitation could lead to a “major loss of prosperity,” economists at Desjardins Group warn in a new paper.
The paper, published Thursday by a team of economists led by chief economist Jimmy Jean, highlights the transformative potential of AI. “Countries that successfully integrate AI into their economic fabric will likely experience significant productivity gains, sustainable growth and improved living standards,” the economists write.
“Conversely, those countries that delay or inadequately manage AI adoption risk widening prosperity gaps, with all the consequences that entail.”
Successful integration will involve everything from navigating profound ethical concerns, to developing regulatory frameworks and technology infrastructure, to finding ways to attract and keep top talent in a competitive global market, they say.
"Ensuring a robust regulatory framework that strikes the right balance between fostering innovation and ethical AI use is essential in order to maintain public trust while leveraging AI’s positive effects."
Uneven and slow
Though Canada has “a strong research ecosystem and a talented pool of AI professionals,” Desjardins’ economists write, adoption of technologies by Canadian businesses is “uneven and relatively slow,” trailing the U.S. and China. A Deloitte survey conducted last year found 15 per cent of Canadian businesses were using AI, with 19 per cent intending to adopt it in the coming years. And a recent survey of information technology decision makers by IT firm CDW found around 60 per cent of Canadian companies are open to the adoption of AI technologies and see the potential to improve productivity, but only around 20 per cent of the decision makers felt their company could implement AI tools.
The “uneven” implementation of AI can be seen in both industry and geographical contexts, according to the economists. Current adoption among Canadian businesses ranks roughly in the middle of OECD countries, and tends toward larger companies in bigger cities, the paper says. Toronto and Vancouver have higher adoption rates, while the rates are lower in Montreal and Edmonton — even though, the economists note, these are where major research and innovation hubs have been established.
The potential reach of AI is broad, the economists write. There are well-known applications in knowledge work fields and professional services, but the opportunities are significant in industries like agriculture and construction, where current rates of adoption in Canada are in the single digits.
With that said, Canada remains competitive. “Canada is a clear leader, having been the first country to establish a national AI strategy in 2017, and is well-positioned in many rankings,” Desjardins says. Canada ranked fifth in the 2023 Tortoise global AI index, which measures investment, innovation and implementation of AI (dropping from fourth in 2021).
Next steps
For Canada to stay ahead of the AI curve, the Desjardins economists suggest a number of steps. They say an essential move for businesses is the digitization of their relevant operations, without which “organizations will have no datasets on which to train algorithms” and no way of exploiting AI’s potential.
“Laggards in digital transformation risk widening the gap with leaders in their industry at home and abroad, putting their long‑term prospects in peril,” the economists write.
They say Canada needs to increase its computing capacity (noting that recent federal funding for infrastructure is a positive move), foster favourable conditions for the creation of AI startups and the retention of top talent, and make training a priority “to prepare the workforce for AI.” All of this, they argue, needs to happen within a collaborative context that understands that AI’s “potential to turn around our sagging productivity makes it an opportunity Canada simply cannot forgo.”
“For Canada to remain competitive, there needs to be a concerted effort by both the public and private sectors to encourage AI adoption and share risks, akin to the collaborative approaches used to accelerate the development of clean technologies.”
John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf.
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