As labour shortages and productivity slowdowns continue to challenge British Columbia and the broader Canadian economy, a new report is pointing to artificial intelligence (AI) as a powerful tool for change.
Published in June 2025 by Vancouver-based think tank the Fraser Institute, the report titled “Can AI Mitigate Our Labour Force Problems?” outlines how AI could help address four major issues impacting Canada’s workforce: declining participation rates, skills mismatches, stagnant productivity growth, and rising wage inequality.
AI as a Gateway to Workforce Participation
Contrary to common fears that AI will lead to widespread job losses, the report suggests the technology could help bring more people into the workforce—particularly those previously left out due to barriers such as skill gaps or geographic isolation.
Digital platforms powered by AI, like Canada’s Job Bank, are already making strides by connecting job seekers to employers more efficiently. These tools provide real-time, localized insights that can match talent with demand, reducing time-to-hire and improving workforce utilization.
“AI doesn’t just automate tasks—it has the potential to unlock employment opportunities for underrepresented groups,” notes Morley Gunderson, the report’s author and an economics professor emeritus at the University of Toronto.
Reviving Productivity Through Smarter Technology
Canada’s productivity growth has taken a hit in recent decades—falling from an average of 1.9% before the year 2000 to just 0.5% in recent years. This trend is concerning as productivity is a key driver of wage growth and national prosperity.
AI can reverse this decline by improving individual output, streamlining operations, and helping workers do more with less. From enhancing labour mobility to enabling remote collaboration across provinces, the technology can remove longstanding bottlenecks and drive efficiencies across industries.
Furthermore, AI could democratize access to high-skill jobs by lowering the educational barriers often associated with them. With tools like AI copilots, knowledge work is becoming more accessible—reducing the need for advanced degrees to contribute meaningfully to digital economies.
Looking Ahead: Embracing the Promise of AI
Rather than resisting technological progress, Canadians should see AI as a potential accelerator for economic resilience and growth.
“AI offers the promise of improving our capacity to produce, earn, and thrive,” says Steven Globerman, a senior fellow at the Fraser Institute. “It’s not about replacing workers—it’s about empowering them.”
As Canada continues to navigate labour force challenges, investing in smart AI adoption and digital upskilling could be the key to turning today’s economic headwinds into tomorrow’s competitive advantage.
