Re-igniting Canada’s productivity engine with AI 

This blog post was provided by Bill Syrros, Partner, National AI Leader and Haya Elaraby, AI, Data, and Automation Leader at BDO Canada.

Canada stands at a crossroads. Despite being renowned for its abundant natural resources, highly skilled workforce, and strong institutions, the nation faces a persistent productivity gap. Even with these advantages, Canada lags its peers in productivity growth and innovation-based economic performance. In 2022, Canada’s business innovation rate stood at 36%, trailing behind the U.S. at 50%, and the OECD average of 45%. Adding further complexity to these challenges are the recent tariff disputes between Canada and the U.S., underscoring the urgency for action.  

BDO Canada’s recent report, Canada’s productivity paradox, delves into the intricacies of this challenge, highlighting key drivers for lagging productivity and offering recommendations for boosting productivity. The spotlight shines on artificial intelligence (AI) as a critical catalyst to reverse this trend. We’re entering what many call the agentic age―where AI doesn’t just assist humans but acts on their behalf, coordinating tasks, decisions, and workflows across systems. That’s a leap in how we define work, and it’s central to closing Canada’s productivity gap.  

What’s causing Canada’s productivity gap? 

BDO’s report underscores several factors contributing to Canada’s lagging productivity, including:  

• Slower adoption of new technologies  
• Lower levels of investment in R&D 
• Canada’s industrial composition 
• Limited competitive intensity 
• Cultural barriers to innovation 
• Skills shortage and mismatch  

These headwinds hinder Canada’s global competitiveness and economic prosperity. Regulatory uncertainty further compounds these challenges, creating hesitation around investment and innovation. The report’s recommendations emphasize a multi-pronged approach, including fostering a culture of innovation, maximizing government incentives, and adopting transformative technologies like AI. 

The ROI of AI 

A recent International Data Corporation (IDC) study from 2024 revealed a compelling return on investment for AI adoption, for every dollar a company invests in generative AI, the ROI is $3.70. The study also highlighted that productivity-focused AI applications are delivering the most significant returns, with 43% of respondents citing these use cases as providing the greatest value. This underscores the immediate and tangible benefits that AI can bring to Canadian businesses seeking to enhance their productivity. 

BDO Canada has experienced firsthand the transformative impact of AI. During their early adoption program of Microsoft 365 Copilot, BDO saw a remarkable 485% ROI, with 98% of users opting to continue using the tool after the pilot. Over 90% of users reported a significant increase in the speed of their task completion, demonstrating the tangible impact of AI on productivity. Since then, BDO Canada has rolled out Copilot to thousands of users across the firm, and through their regular use of the platform, over 100,000 hours of time was saved in 2024 alone. The firm is also implementing nearly a dozen other AI initiatives as part of its strategy to build an AI-first culture.  

What we’ve seen internally at BDO is just the beginning. The real opportunity ahead lies in scaling beyond Copilot and into AI agents that not only respond to tasks—but proactively initiate, route, and complete them across teams and platforms. This is where the next productivity multiplier lives. 

How to leverage AI to boost productivity 

The potential of AI to bolster Canadian business productivity and resilience in the face of uncertainty is immense. The fragmented nature of most business systems remains a major barrier. Without orchestration layers or connected workflows, even the best AI tools are limited in scope. Future productivity gains will come from integrated, event-driven architectures that enable agents to work across business functions. 

To illustrate how businesses can leverage AI to automate repetitive tasks, provide deeper insights from data, and develop innovative products and services, consider these key use cases: 

1. Automated financial planning and analysis: AI can streamline financial planning and analysis by automating routine tasks, such as budgeting, forecasting, and variance analysis. This allows finance teams to focus on strategic decision-making and cost-saving opportunities. 
2. Predictive analytics: AI can forecast market trends and consumer demand, helping businesses adjust their strategies to mitigate the impact of market shifts and disruptions. 
3. AI-powered customer support and chatbots: Automate responses to inquiries, reduce call center costs, and improve efficiency. 
4. Automate administrative tasks: Automate manual tasks like meeting transcription, scheduling, and document processing, freeing up employees for higher-value work. 
5. Agentic AI for orchestration: AI agents can coordinate complex processes, such as manage audit files, route approvals, or monitor workflows for bottlenecks—then trigger the next best action automatically. These aren’t future concepts—they’re in pilot today, and they represent the next evolution of workplace productivity. 

These targeted applications demonstrate AI’s power to directly address productivity challenges, achieve cost optimization goals, and build resilience. The next wave of productivity won’t simply come from adopting more tools; it will emerge from enabling AI agents to work alongside us, orchestrate actions, and continuously optimize how work gets done. By operationalizing AI today, businesses can help set Canada on a path from merely catching up to truly leading the global economy. 

Explore Canada’s productivity paradox report for more recommendations on boosting productivity and innovation and discover BDO’s Practical AI solutions that can drive your business forward.