Canada’s rush to AI adoption will require honesty about both the benefits and the risks: Polk
Prime Minister Mark Carney pictured in Etobicoke, Ont., announcing bail reform legislation on Oct. 16. ‘His bet on AI is the right one. Even as he rightly works to position Canada and Canadians for AI success in this onrushing creative transformation, his government must be equally ready to assist those who are the human collateral damage of this work-changing and world-changing transformation. This, in itself, will require honesty about both the benefits and the risks,’ writes Ken Polk. / TWITTER PHOTO
This week, Canadian Peter Howitt shared the 2025 Nobel Prize in Economics for his work in providing a mathematical expression for the economic theory of creative destruction.
The theory was first articulated by economist Joseph Schumpeter in the mid-20th century. It holds that the driving engine of capitalism is innovation, which is itself driven by entrepreneurship and the rapid commercialization of new technology.
Creative destruction comes about by the inevitable supplanting of a dominant technology by a newer, more profitable one. This explains the evolution of capitalism from the agricultural age, to the industrial age, to the computer age, to the digital age; and from local to national and then to global markets. Along the way, the companies and jobs in demand under one technology are torn down and replaced by new ones.
Howitt’s achievement is being rightly celebrated as evidence of Canada's capacity to nurture the best and brightest. At another level, his work addresses the challenges that Prime Minister Mark Carney and his government face in positioning Canada at the forefront of the next rapidly surging wave of “creative destruction”: artificial intelligence (AI).
Canadians uneasy about AI
From its potential to streamline sclerotic federal service delivery to accelerating Canada’s lagging labour productivity, to attracting and retaining the best global talent, Carney has gone “all in” with a big bet on AI. Making Evan Solomon Minister of Artificial Intelligence is but the most visible sign of Carney’s commitment, which includes investment in the Pan-Canadian AI Strategy, as well as investment in quantum computing, and photonics. Expect to see a lot more about AI in the Nov. 4 budget.
Yet while his government is in a headlong march forward on AI, Canadians are more hesitant. A September Ipsos poll rated Canada as the least enthusiastic about AI among 30 countries studied.
Why the reticence? On a superficial level, many of us had our first exposure to AI through The Terminator and Matrix movies, wherein all-powerful, self-aware AI unleashes nuclear devastation to save itself and enslave humanity. (Although researchers will tell you the prospect of AI self-awareness is at least decades away, and is likely an impossibility.) There is also discomfort with the notion that the generative AI systems already in use will be substituted for human intelligence in decision-making. (Although it must be said that, as we observe history and the current state of the world, natural human intelligence has hardly been an unmixed blessing!)
The technological casualties are piling up
But at its most elemental human level, it comes down to the fear that AI, like other new technologies before it, will cost people their jobs. The blunt fact is that people will lose their jobs. Indeed, the Prime Minister has been quite open about his intention to apply AI to federal service delivery. Nervous federal employees know that this means layoffs, whether through what is euphemistically called attrition or more aggressive downsizing. Employees in the private sector are no different from their public sector counterparts and share the same concerns.
This is the crux of the inherent dilemma for political leaders in the process of economic creative destruction. No nation can wall itself off from technological change and hope to maintain a growing economy and a high standard of living. Experience also shows that the jobs rendered obsolete by technological change will be replaced by new jobs that didn’t exist before. (Think the rapid decline of brick-and-mortar stores and the equally rapid rise of e-commerce companies.)
Such assurances will be cold comfort for people who are more worried about making their next mortgage, rent, or car payment. For them, creative destruction is simply destruction. Substitute “voters” for “employees” and you see the underlying political risk for governments, which are in many ways the only buffer people have against the potential displacement and dispossession that accompany technological change. The CEOs of tech giants cannot be voted out, governments can be.
And let’s be frank, the technological casualties are piling up. The pace of technological change continues to accelerate. It took about a century to complete the shift from agriculture to industry. But it only took about a decade to see the shift from storefront retail to e-commerce. Technology like the Blackberry, the fax, and CDs that are dominant one day, are irrelevant the next. With each new technological creation, the pool of the destroyed and left behind has grown, in part fueling the populist backlash behind movements such as Brexit and the election of Donald Trump.
Avoiding the 30,000-foot economic view
During the Second World War, bomber pilots, who dropped bombs from high altitudes, never saw their targets up close. They could carry out devastating missions without feeling the emotional impact of the destruction below. This psychological distance created a moral disconnection — they were performing a technical duty but were detached from its human cost.
So while we celebrate Peter Howitt's incredible personal and intellectual achievement, Prime Minister Carney, an economist of some repute himself, must avoid an economic bomber pilot syndrome when it comes to AI.
His bet on AI is the right one. Even as he rightly works to position Canada and Canadians for AI success in this onrushing creative transformation, his government must be equally ready to assist those who are the human collateral damage of this work-changing and world-changing transformation. This, in itself, will require honesty about both the benefits and the risks.
On Nov. 4, we should be looking for signals of how the government plans to help AI-displaced Canadians. You can be sure that anxious voters will be. At the end of the day for the Prime Minister, it is voters who count, not economists.
