Bank of Canada: AI will reshape work, not eliminate it-yet
Artificial intelligence is changing how tasks get done across Canada's economy, but widespread job losses haven't materialized so far. That's the finding from the Bank of Canada, which examined AI adoption in the labour market.
Michelle Alexopoulos, the central bank's external deputy governor, told a business audience in Ottawa on Wednesday that early evidence shows companies are using AI mainly to boost productivity and automate routine work rather than replace workers outright.
"As AI continues to improve and its adoption spreads, it could permanently change how the Canadian economy works," Alexopoulos said. Long-term productivity gains could allow employers to raise wages without fuelling inflation, she added.
Uneven adoption across sectors
AI use remains concentrated in specific industries. Information and cultural companies lead adoption at 35.6% as of the second quarter of 2025, followed by professional and scientific services at 31.7% and finance and insurance at 30.6%, according to Statistics Canada.
Accommodation and food services lag far behind at 1.5% adoption, as do transportation, warehousing, and agriculture.
The Bank of Canada expects some roles will eventually disappear while others are created or significantly reshaped. Alexopoulos compared the looming shift to the rollout of computers, which eliminated typist and switchboard operator positions but created IT departments and new office roles. That transition took many years, and computerization ultimately didn't reduce total employment, she said.
Entry-level hiring already shifting
Some strain is already visible in specific labour market segments. Technology firms have cited AI as a factor in recent layoffs, and hiring in entry-level roles exposed to automation-including coding and customer service positions-has weakened.
Three in 10 HR leaders in the U.S. say their talent acquisition strategy is shifting toward hiring fewer entry-level workers in favour of mid-level employees who can use AI to complete tasks previously assigned to junior staff.
Alexopoulos advised younger workers and employees in affected industries to develop AI skills as demand rises for people who can work effectively with the technology.
AI as a tool, not a replacement
Inside financial institutions, surveys of risk-management experts show AI is supporting decision-making rather than replacing it. Tools handle routine work so staff can focus on higher-value tasks.
Health care offers another example. Note-taking software automates clinical documentation, freeing doctors to spend more time with patients. "This reinforces the view that AI will mostly transform jobs-not eliminate them," Alexopoulos said. "AI is changing how tasks are done, but humans remain in control."
Demographic trends may also limit disruption. With population growth slowing and many employers already struggling to hire, increased AI use could coincide with more job vacancies, allowing some displaced workers to move into other roles rather than exit the workforce.
HR professionals should prepare for a gradual but significant reshaping of work. For organizations planning AI adoption, understanding how the technology affects different roles-and which skills workers need to develop-will become essential. AI for CHROs and AI productivity courses can help leaders navigate these shifts.
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