The Risk We See but Don’t Acknowledge
Governments, businesses, and technologists are treating AI as the fix for Canada’s productivity problem. The logic seems sound: AI automates tasks, increases output, and makes businesses more efficient. And given Canada’s long-standing struggle with slow productivity growth, AI looks like a golden ticket.
Of course, it could be—but not on this trajectory.
That’s where the real danger lies. AI isn’t just changing how we work—it’s rewiring the entire economy in ways that policymakers and business leaders aren’t prepared for. For Main Street, it’s not going to be just a productivity boom—it’s going to be an economic shockwave.
The Invisible Offshoring Effect: Jobs Aren’t Moving—They’re Just Gone
For decades, globalization worked in a predictable way: when jobs left Canada, they still existed somewhere else. When manufacturing moved offshore, workers in China or Mexico took on those roles.
AI is different. It doesn’t move jobs offshore—it erases them outright.
An accounting firm that cuts 40% of its workforce because AI boosts the productivity of the remaining 60% isn’t just creative destruction—it’s obliteration. Scale that across an industry, and the accounting profession itself is in trouble. Sure, the partners make more money, but that 40% of the previous workforce? They need a new career.
- AI legal software drafts contracts and conducts legal research in seconds—no need for teams of junior lawyers.
- AI-powered financial analysis tools outperform human analysts—entire departments shrink overnight.
- AI-driven customer service replaces thousands of call center agents—no outsourcing, just vanishing jobs.
- We’re already seeing it in the tech industry—AI replacing software engineers.
This isn’t just another wave of automation. These jobs don’t come back. And the impact isn’t limited to manufacturing or call centers—high-skill, white-collar service jobs are now in the crosshairs. It’s a skill problem – The AI world needs different skill sets the old standards are at risk.
The Productivity Illusion: Why AI Won’t Save Main Street
On paper, AI looks like a productivity miracle—but that’s because our economic models are outdated.
Canada’s productivity challenges stem from structural inefficiencies, low investment in automation, and slow innovation. But AI isn’t fixing those issues—it’s simply removing the need for human labor, while failing to reinvest in the broader economy.
That’s the real challenge. AI can unlock enormous potential—but only if we design for value creation, not just efficiency. In my own ventures, AI is embedded into competitive advantage, it’s a central component of value, but that doesn’t mean hiring works the same way anymore. Ventures I design today look nothing like the ventures I designed 3 years ago.
What’s clear to me is that growth models are changing. Adding people is no longer the same as adding capacity in an AI world. Labour arbitrage is happening in real-time.
Here’s where things break down:
- AI increases corporate efficiency → fewer workers needed.
- Fewer workers → less consumer spending.
- Less consumer spending → small businesses and service industries struggle.
- Struggling businesses → lower demand for labor, shrinking wages, and economic stagnation.
So while corporate balance sheets look healthier, Main Street will be starved of the wages that keep it running.
AI doesn’t solve our productivity crisis—it accelerates the breakdown of consumer-driven economic momentum. But right now, that’s hard to swallow, because we’re basking in the bubble and a bubble it is.
Canada’s Service Economy: A House of Cards?
Canada has a diverse economy, but services dominate—accounting for nearly 70% of GDP and employing three-quarters of Canadians.
Industries like banking, retail, healthcare, education, consulting, and customer support only thrive as long as money is flowing through the entire economy.
But unlike manufacturing, many services don’t produce tangible goods. There’s no inventory to fall back on. No stored value. If spending slows, revenue disappears instantly. The services economy is either on or off. It makes money in the moment, or it doesn’t.
So, using AI to reduce risk in that model is a no-brainer for business—and that is where the problem lies.
Here’s what happens next:
- AI removes jobs → wages decline.
- Wages decline → consumer spending slows.
- Consumer spending slows → businesses struggle.
- Businesses struggle → service-based GDP contracts.
For an economy so heavily dependent on services, this isn’t just a challenge—it’s an existential risk. This is the AI wonderland that nobody wants to face and it’s closer than the existential risk to humanity that Geoffrey Hinton is warning about.
Remember, an economy is the macro flow of money. Mess with that at scale, and it’s going to get ugly on a micro scale.
We Need New Economic Thinking—Fast
This isn’t about resisting AI because that would be foolish. It’s about building a system where AI advancements lift everyone—not just a handful of elite stakeholders.
It’s a huge opportunity—but only if we take action now.
- How do we support displaced workers? New jobs don’t just appear. We need to create them. It’s time to invent a new Canadian model that is globally focused.
- How do we redefine economic success? If AI generates value without corresponding wages, GDP metrics need to evolve. We need more possibilities.
- Who benefits from AI profits? Should AI-driven corporations contribute to an economic stability fund? Canada is small enough to innovate a solution—but larger economies are going to face real disruption. This is creative destruction on an unprecedented level.
- Is Canada’s reliance on services sustainable? Do we need a pivot toward industries that generate real, lasting value? Yes. It’s time to amplify Canada’s true wealth: People, Brains, Resources, Reputation, and Capacity. Our failure isn’t talent—it’s capital, risk and possibility. We need to refine the Canadian mission.
- AI is a rapid, incremental shift—but it’s transformative and permanent. If we don’t plot a course forward, we won’t be able to cope with the wreckage left in its wake.
- It’s already here. I see it in business plans, in the acceleration of capacity, in the slowing of high-skilled hiring. As William Gibson said, “The future is already here—it’s just poorly distributed.”
Right now, we don’t need more technology. We need the big thinkers.
But New Jobs Will Just Emerge—Right?
Will they? Necessity may be the mother of invention, but it needs direction to evolve from.
That’s where we must focus now—cue the entrepreneurs.
Assuming new jobs will appear organically, without a deliberate strategy, isn’t realistic. The first clue? The AI industry’s obsession with creating agents that do everything—not just tools, but decision-makers. That shift is unprecedented. Layer in robotics, and things get even more interesting. The adoption rate of AI technologies is the canary in the coalmine – it’s fast and everywhere. This is a global race to something uncharted and we need to start thinking about maps.
This isn’t the end. This is not meant to pour water on the extraordinary, but we need to frame it intelligently. This is a new beginning—but only if we harness human ingenuity to shape it.
So, is Canada’s future a composite of rapid change, driven by innovation and creativity in ways we’ve never expressed before?
Short answer: Yes.
If future is already here—just poorly distributed – The question is: Will we shape it, or let it shape us? There’s only one choice. It’s not a question, any more than choosing to breathe is.
Honestly, this is the fun part – seeing the danger lets us invent the way to new and more powerful possibilities.
Stay tuned— Stay tuned—I’ve got some powerful ideas on how we can flip this from threat to opportunity: bold policy shifts, new business models, and a playbook for thriving in AI’s economic storm.
Brady