Canadian businesses’ use of AI: What the evidence shows

As businesses worldwide are adopting artificial intelligence to boost productivity, little has been known about how businesses in Canada are using it. Survey results from the Bank of Canada show that AI adoption remains at an early stage for many Canadian businesses. As well, businesses expect AI to affect capital spending and employment, but only gradually.

Artificial intelligence (AI) has quickly moved from being a novelty to becoming an everyday tool for many workers across Canada. In fact, more than two-thirds of business leaders told us they personally use AI tools in a typical work week.

Despite this widespread use of AI by individual leaders, our survey data reveal that broad adoption of AI across business operations remains limited. However, AI adoption seems likely to deepen over time as businesses integrate the technology into more aspects of their operations.

We know this from responses to special questions included in the December 2025 edition of the Bank of Canada’s Business Leaders’ Pulse (BLP) survey. These questions aimed to fill a data gap about how Canadian businesses are using AI, how it is affecting them today and how it could affect them in the future. The responses offer new insights into AI adoption and what that could mean for capital spending and employment.

The use of artificial intelligence by businesses remains at an early stage

Aligning our approach with other research on AI adoption, we distinguish between individual use of AI and its adoption across business operations, particularly in production processes. Individual use typically leads to small productivity gains within existing jobs. The largest economic effects, however, are likely to come from changes in how businesses operate and make employment and capital spending decisions.

Only 8% of businesses in the survey said they use AI significantly in their core operations, with 50% saying they use AI to a low or moderate degree in core operations (Chart 1). A further 11% reported that they plan to start using AI in 2026. Meanwhile, 28% of businesses said they are not using AI and do not plan to adopt it in 2026, with many not seeing AI as relevant to their work.

Businesses reported using AI for a range of tasks, including drafting documents, generating content and analyzing data. More advanced applications, such as robotics and image processing using machine learning, are less common. That said, businesses do plan to increase their use of more advanced AI applications over the next three years.

We also find that size, region and industry matter for AI adoption.

• Small businesses are less likely than large businesses to report using AI. This is common when new technologies emerge because small businesses often have fewer resources to test new tools.
• Firms in Quebec and Ontario have the highest adoption rates, likely reflecting the industry composition of these regions.
• Adoption rates are highest for businesses in accommodation, food and professional services industries and lowest for businesses in the natural resources sector.

Overall, the results suggest that businesses in Canada are only starting to leverage AI technologies, leaving room for a deeper integration into core operations.

Capital spending on artificial intelligence is expected to strengthen over time

Capital spending on AI can take many forms. Businesses may buy machinery with built-in AI tools, such as AI sensors in farm equipment or AI-enabled manufacturing equipment. They may also develop custom AI tools or invest in technologies such as microchips and robots.

About 70% of businesses said they expect that AI would have no material impact on their capital spending in 2026 (Chart 2). This share includes businesses that reported not using AI and therefore not changing their capital spending plans. In contrast, about 30% of businesses said they plan to increase their capital spending because of AI over the next 12 months.

However, the number of firms expecting to increase their capital spending on AI grows over time. Looking ahead three years, nearly 40% of businesses expect higher capital spending due to AI. Specifically, about one in four expects a small increase while one in eight expects a large increase. Few businesses anticipate AI-related declines in capital spending.

Employment impacts are expected to be modest for now

As with capital spending, businesses expect little effect on employment in the near term.

However, the picture over the next three years looks slightly negative overall: 23% of businesses expect negative employment impacts and 11% expect positive impacts (Chart 3). Moreover, businesses with 20 or more employees are more likely than smaller firms to expect AI to reduce employment over the next three years.

Taken together, these results point to some risk that employment levels could be lower over the next three years than they otherwise might be.

As a recent Sparks at Bank article highlighted, AI does not appear to be significantly reshaping the Canadian labour market at this time, but it may be influencing hiring decisions for jobs more exposed to AI. Similarly, the results from the BLP may mask challenges facing specific occupations or groups of workers.

Understanding businesses’ use of artificial intelligence supports effective policy-making

Companies generally need time to figure out how to get the most out of any new technology. So it may not be surprising that many businesses are still experimenting with AI to find out how best to use it in their operations. As a result, the economic effects from AI may take time to build, although the largest impacts could ultimately be concentrated within a subset of businesses and tasks.

But AI is being adopted at a much faster rate than the internet or personal computers were. Even though the effects of AI currently appear limited in Canada, that could change quickly. AI capabilities are evolving quickly along with the use cases for this technology.

Understanding how businesses are using AI and how they expect it to affect capital spending and employment can shed light on the potential implications for the country’s productivity, economic growth and labour markets. It also allows us to compare AI adoption in Canada against that of other countries and assess where Canadian businesses stand relative to their international peers. These insights can help policy-makers understand how AI may influence inflation, which the Bank strives to keep low and stable. That possible influence makes AI adoption worth monitoring closely, and surveys such as the BLP allow us to do just that.

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