Canadian companies are increasingly integrating artificial intelligence (AI) into their operations to boost productivity, competitiveness, and innovation.
AI adoption in Canada is occurring across industries and company sizes, but with marked variation in pace and depth. This trend reflects a broader global shift toward AI-driven economic transformation and workforce change.
Measures of AI Adoption Across Canadian Businesses
A growing number of Canadian businesses are turning to AI to enhance performance and address competitive pressures. A 2025 study showed that 71% of small and medium-sized businesses (SMBs) in Canada now actively use AI or generative AI tools.
Among those SMBs, nearly 75% plan to increase AI investment, and 63% prioritize generative AI, which includes tools like automated content creation and smart automation.
Statistics Canada data from the third quarter of 2025 showed that 14.5% of Canadian businesses plan to use AI within the year. This contrasts with 66.7% reporting no plans and nearly 19% undecided, indicating room for growth.
Industry differences emerge clearly:
- Information and cultural sectors reported the highest adoption intentions.
- Finance and insurance, as well as professional services, also showed strong interest in AI uptake.
These figures suggest that while broad interest in AI exists, practical adoption remains uneven across sectors.
Canada’s Position in the Global AI Landscape
Although adoption is rising rapidly, some data suggest Canada trails international peers at deeper levels of AI maturity. A report found only 7% of Canadian tech leaders consider their organizations “advanced” in AI implementation, compared with 17% globally.
Similarly, Canadian companies lag in advanced AI techniques, large-language-model use, and go-to-market operational AI compared with global benchmarks. This gap highlights structural challenges like talent shortages and scaling barriers.
This dynamic does not mean Canadian companies lack ambition. In fact, 31% of firms reported that gaining competitive advantage was their core motivation for AI adoption, a higher rate than the global average.
Technologies and Use Cases Driving Adoption
Canadian businesses are implementing AI across a range of functions and processes. Common areas of use include customer service automation, workflow streamlining, content generation, and data analytics.
Generative AI tools are especially prominent, with surveys showing at least 51% of employees in Canada use generative AI tools at work by late 2025. Many organizations report increased productivity and decision-making support from these tools.
Use cases also vary by size: smaller firms often focus on cost reduction and marketing automation, while larger organizations pursue broader digital transformation.
Structural Barriers and Governance Gaps
Despite rising interest and activity, several barriers slow Canada’s AI acceleration. A recent PwC Canada report highlighted a substantial “readiness gap” in AI governance and risk management, even among organizations prioritizing responsible AI.
According to the report:
- 72% of organizations say responsible AI is a priority,
- Yet 36% lack dedicated governance functions to manage responsible use and risk.
This mismatch between strategic ambition and operational readiness could hinder long-term impact and trust in AI solutions.
Talent scarcity remains another major obstacle. Almost half of Canadian leaders cite a lack of technical talent as a top barrier to scaling AI, a concern echoed across industry studies.
Economic Impact: Growth, Productivity, and Investmen
AI adoption is already generating measurable economic benefits in Canada. A report from the Vector Institute estimates AI-related jobs contributed between $42 billion and $52 billion in Ontario alone over the past five years. Across Canada, AI is linked to an estimated $82 billion to $100 billion in economic output.
Projections suggest that continued AI adoption could add $298 billion in AI-driven economic growth nationwide and create roughly 41,500 new jobs annually through 2035.
This potential growth underscores AI’s role as more than a productivity booster: it is a driver of GDP expansion, new skill demand, and sector transformation.
Social and Workforce Implications
Adoption of AI enables operational shifts that affect Canadian workplaces and labor markets. Increased use of AI tools often reduces routine administrative burden, freeing people to focus on higher-value tasks.
However, concerns remain about workforce readiness and skill gaps. Surveys indicate employees want clear AI policies and better training to effectively and responsibly use AI tools.
As AI becomes part of everyday work, employers face pressure to upskill staff through training, education, and internal governance.
At the same time, AI can reshape job roles, blending analytics, automation, and decision support with traditional occupations.
Government and Public Sector Roles in Accelerating Adoptio
Public sector leadership plays a role in Canada’s AI landscape, both as a user and as a policy guide. Evidence suggests that government adoption of AI can stimulate broader market confidence and uptake, particularly among smaller firms.
Public investments in cloud infrastructure, skills training, and AI research hubs also support the broader ecosystem.
For example, collaborations between academic institutions and industry can help narrow talent gaps and improve commercialization outcomes.
However, experts note that policy clarity, governance standards, and trust frameworks are essential for responsible and inclusive AI expansion.
Predictions and Future Trends
Experts and industry reports forecast continued AI growth and deeper integration across Canadian businesses through 2026 and beyond.
Many leaders expect AI to become a core part of operations rather than a niche experiment, driving strategic differentiation and competitive advantage.
Broader adoption of generative AI, more robust governance structures, and expanded skills training are likely to define the next phase of Canada’s AI trajectory.
With supportive policy frameworks and sustained investment, Canadian companies could narrow the global maturity gap over the next decade.
