Canada Needs 'Courage and Patience' From Firms on AI, Central Bank Official Says

By Paul Vieira

OTTAWA--Canada requires a combination of "courage and patience" for the economy to emerge from the current state of turbulence to more solid and prosperous footing, says the Bank of Canada's No. 2 official.

Carolyn Rogers, the central bank's senior deputy governor, says, for instance, Canadian firms need to pick up the pace of investment, especially in the area of artificial intelligence. During a question-and-answer session at a University of Toronto conference, she said AI would help lift the economy's speed limit, or potential output--which is the level of growth an economy can record before triggering inflationary pressure.

"We're probably going to have to stick our neck out and do things that feel a bit risky to us or uncomfortable," Rogers said. "If we wait until there's clear and uncontestable proof that AI produces productivity increases, we will have lost the plot. We will be too far behind."

Rogers said that, despite elevated levels of uncertainty fueled by the Trump administration's policies, Canadian firms and households "are going to have to take a leap of faith and have a bit of courage as a country and as an economy on some of these decisions. And then we're going to have a little bit of patience, because this stuff isn't going to pay off overnight."

The conference was focus on improving Canada's productivity, which remains the economy's Achilles' heel.

Productivity rose in the third quarter from the previous three-month period, although it remains below levels set in early 2021. Research from the Ottawa-based Centre for the Study of Living Standards indicates Canada's productivity growth has slowed dramatically, to less than 1% annually since 2000 from a 3.7% pace seen for decades after the Second World War. This reflects a period of weak business investment. The C.D. Howe Institute, a Toronto think tank, estimates that spending by Canadian firms on improving their labor force is roughly half the level of U.S. peers.

Rogers's remarks on the need for companies to embrace AI build on a warning last week from Bank of Canada Gov. Tiff Macklem. Macklem said that adoption among Canadian firms of AI remains low. "Waiting for [the AI impact] to go away is not going to work," he said, following a speech, also in Toronto.

Write to Paul Vieira at [e-mail]

(END) Dow Jones Newswires

02-12-26 1022ET