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AI Isn't Boosting Canada's GDP the Way It Is in the U.S.
New RBC analysis finds Canada's slower AI adoption has had a net-neutral effect on GDP growth, though long-term productivity gains remain possible.
Canada is investing more in artificial intelligence, but that spending isn't translating into GDP growth the way it is south of the border, according to new analysis from Royal Bank of Canada economists published November 12, 2026.
The core problem: most of the hardware Canada is buying to build AI infrastructure is made elsewhere. RBC senior economist Claire Fan says 75 per cent of the computer and peripheral equipment purchased for AI is imported, which means the economic benefit flows to the countries producing it, not to Canada.
Canada Is Spending, Just Not on Canadian-Made Tech
AI-related equipment purchases surged 28 per cent in the first half of 2026, based on national accounts data. That's a significant jump, but Fan says those investments are not expected to add to Canada's GDP growth in the same way as comparable U.S. spending.
The U.S. has a much larger domestic semiconductor and hardware manufacturing base, which means American AI investment keeps more money circulating in the American economy. Canada doesn't have that same feedback loop, at least not yet.
Joël Blit, an economics professor at the University of Waterloo and co-founder of the Canadian AI Adoption Centre, agrees with that assessment. "Canadian businesses are adopting at a slower pace than American businesses," he told Global News. He also acknowledges that infrastructure investment currently benefits the economies producing the technology, not Canada's.
The Real Gains Haven't Arrived Yet
Blit isn't pessimistic about the long-term picture, though. He studies how disruptive technologies, including electricity, computers, and the internet, work their way through economies. His view is that Canada is still in the early phase, where new technology gets dropped into existing workflows as a direct replacement rather than prompting deeper structural change.
He uses a vivid example to explain the difference. Barnes and Noble used the internet to improve inventory tracking and help customers find books. Amazon rebuilt the entire book-selling model from scratch. The first approach produces modest gains. The second one reshapes industries.
"Real gains come when people reimagine how they do their business," Blit said. Getting there requires more than buying hardware. It also means retraining workers and re-engineering business processes to actually take advantage of what the technology can do.
Canadians Use AI but Don't Like It
There's a telling tension in public opinion data collected by Angus Reid in the first half of 2026. While 43 per cent of Canadians view AI negatively and 24 per cent are outright critical of it, 41 per cent still use it more than once per week. Only 30 per cent say they don't use AI at all.
That gap between attitude and behaviour is worth watching. Widespread individual use, even reluctant use, could help build the kind of practical familiarity that eventually drives broader business adoption.
What Comes Next
Canada's AI story isn't a failure, it's a lag. The productivity gains Blit expects are real, but they depend on businesses moving past simple substitution and rethinking how they operate. That takes time, investment in people, and process changes alongside the hardware purchases.
For Canadian workers and businesses, the window to get ahead of that curve is still open. The question is how long it stays that way.