CANADA'S PRODUCTIVITY PARADOX
Elisabeth Saftiuk
PHOTO BY IAN MCCAUSLAND
Generative AI: A turning point AI dominates headlines, think pieces and predictions about the future. It can feel hard to separate the noise from what matters most for businesses on the ground. The truth is that the hype ends where the workplace begins. Generative, predictive and agentic AI are already reshaping how work gets done. These tools can summarize documents, analyze large data sets, forecast trends and even support creative tasks like drafting reports or designing visuals. Used effectively, they hold the potential to reverse Canada’s long- standing decline in productivity. And the impact is measurable. An MIT study involving 453 university-educated professionals found that participants who used ChatGPT to help with tasks completed their work about 40 per cent faster. Similarly, Google estimates the average Canadian worker could save 100 hours a year by adopting these technologies. And, yet, Canada lags. We are a global leader in AI research but slow to put it into practice. Closing this gap will take more than innovation on paper. It will require investment, adoption and action from both businesses and government. A coordinated approach is key. If we succeed, AI can become a catalyst for higher productivity, greater competitiveness and stronger economic growth across the country.
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of Canadians aged 25 to 64 held a post-secondary credential — the highest rate among G7 countries and well above the OECD average of 41 per cent. But despite this strong foundation of education, Canada’s productivity growth has not only failed to keep pace, it has worsened over the past decade, as RBC research makes clear. The Canada West Foundation points to a critical driver of Canada’s productivity gap: slow adoption of innovation. The Productivity Project — a collaboration of experts from academia, industry and policy — finds that Canadian firms have been hesitant to embrace new technologies and advanced digital tools, placing Canada 15th among 20 peer countries in innovation performance. These factors highlight the urgency of addressing Canada’s productivity challenge, not as an abstract policy debate but as a practical barrier to competitiveness and prosperity.
9 WINTER 2025
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