Bank of Canada sees limited AI‑related job losses

HR professionals should be preparing for a slow but far‑reaching reshaping of work.

That’s because artificial intelligence may not yet be causing widespread job losses, but it is quietly changing how tasks are performed across the economy, according to a report from the Bank of Canada.

Speaking to a business audience in Ottawa on Wednesday, external deputy governor Michelle Alexopoulos said early evidence suggests AI is being used mainly to enhance productivity and automate routine tasks rather than to replace workers outright, reported The Canadian Press (CP).

“As AI continues to improve and its adoption spreads, it could permanently change how the Canadian economy works. By lowering costs for businesses and improving efficiencies, AI could support higher wages, reduce prices for consumers and spur new investment,” she said in prepared remarks cited by CP.

Gradual disruption, uneven across sectors

Alexopoulos said AI has the potential to deliver long‑term productivity gains in Canada, which could allow employers to raise wages without fuelling inflation. She cautioned, however, that it is still too soon to say whether AI will transform business as fundamentally as computers did, or remain a powerful but narrower technology.

The central bank’s current assessment is that the overall impact on employment has been modest. The Bank of Canada “hasn’t seen widespread evidence of AI replacing workers in the labour market,” Alexopoulos said, though it expects some positions will eventually be eliminated while others are created or significantly reshaped, CP reported.

She compared the looming disruption to the rollout of computers, which led to the disappearance of roles such as typists and switchboard operators but also to the creation of IT departments and new types of office work centred on digital tools. That transition unfolded over many years and “ultimately, computerization did not lead to fewer jobs,” she said, according to CP.

Three in 10 (30%) HR leaders in the U.S. say their talent acquisition strategy is shifting towards hiring fewer entry‑level workers in favour of mid‑level employees using AI to complete what were previously junior tasks. 

Early signs of strain and skills shift

For now, AI adoption remains uneven across industries. Alexopoulos noted that use of the technology is concentrated in sectors such as finance and insurance, while uptake has been limited in areas like food services and accommodation, CP noted.

Here are the industries with the highest and lowest AI adoption rates across Canada, according to data from Statistics Canada (StatCan):

Demographic trends could also temper labour market disruption, she suggested. With population growth slowing and many employers already facing hiring challenges, increased use of AI could coincide with more job vacancies, allowing some displaced workers to move into other roles rather than leave the workforce entirely.

At the same time, Alexopoulos acknowledged there are early signs of strain in specific segments of the labour market. Some technology firms have cited AI as a factor behind layoffs, and some studies point to weak hiring in entry‑level jobs that are highly exposed to automation, including roles in coding and customer service, CP reported.

AI as support tool, not replacement

Alexopoulos said younger workers and employees in affected industries should upgrade their AI skills as demand rises for people who can work effectively with the technology.

The central bank has been examining how AI is being deployed inside financial institutions. Surveys of risk‑management experts suggest decision‑making is being supported by AI, not replaced by it, with tools primarily used to handle routine work and free staff to focus on higher‑value tasks, according to CP.

Alexopoulos pointed to health care as another example, highlighting note‑taking software that helps automate clinical documentation so doctors can spend more time with patients. “This reinforces the view that AI will mostly transform jobs – not eliminate them,” she said. “AI is changing how tasks are done, but humans remain in control.”

OpenAI is refocusing its business on workplace professionals, betting that AI “co‑workers” embedded in everyday tools will drive its next phase of growth and help cover the massive costs of running its models, HRD previously reported.