The Bank of Canada is rolling out a new artificial intelligence model to assist policymakers with economic forecasting, governor Tiff Macklem announced Monday during a speech in Halifax.
The model, called Prima, will be used for the first time as the central bank’s primary forecasting tool ahead of its next interest rate announcement and Monetary Policy Report, scheduled for Oct. 28. Macklem said the tool is meant to help officials separate temporary inflation pressures from more persistent ones and to weigh alternative economic scenarios as part of the bank’s quarterly forecasting process.
During the same speech, Macklem warned that new United States tariffs could cut Canada’s fourth-quarter economic growth in half, underscoring the kind of volatile, supply-shock-driven environment the new model is intended to help navigate.
“No model is going to solve every problem, but we are hopeful that this model will be better suited for a world with more supply shocks and in a more interconnected world,” Macklem said at a press conference following his remarks. He added that the bank plans to test how Prima would have performed during past economic episodes while also using it for forward-looking forecasts.
Expanding Use of AI at the Central Bank
This is not the Bank of Canada’s first public disclosure of AI use in its operations. In 2024, Macklem told attendees at an AI-focused conference in Toronto that the bank already uses artificial intelligence to forecast inflation and economic activity, monitor sentiment across key sectors, clean and verify data, and improve operational efficiency.
The bank’s computer scientists also use AI to speed up coding work, and the institution has developed its own internal large language model for tasks such as writing, translating and summarizing text.
Asked about security concerns tied to AI adoption, Macklem said the bank is proceeding carefully. “It’s still early days. We want to make sure we use AI responsibly. We want to make sure there’s human control,” he said, adding that the technology has improved considerably since the bank first began using it.
AI Adoption Spreading Across Canadian Businesses
The Bank of Canada has pointed to AI as a potential lever for boosting Canadian productivity, which Macklem noted has lagged for roughly 25 years. External deputy governor Michelle Alexopoulos said in a May speech that AI has the potential to influence productivity, economic growth, employment and inflation, and that adoption is accelerating.
Data from the central bank’s first-quarter Canadian Survey on Consumer Expectations found that more than 30 per cent of respondents use AI to generate or edit content at work, almost 25 per cent use it to analyze data, code or conduct research, and just over 20 per cent use it to automate tasks.
Separately, Statistics Canada data from the second quarter of 2026 showed that 19.2 per cent of Canadian businesses had used AI to produce goods or deliver services over the prior 12 months — roughly triple the share reported in the second quarter of 2024. Businesses in information and cultural industries, finance and insurance, and professional, scientific and technical services were among the most likely to adopt the technology.
Productivity Gains Expected to Take Time
Macklem said in his Monday speech that businesses generally view AI as a way to improve services, cut costs and boost productivity, but cautioned that most firms are not overhauling their operations overnight. “It will take time for bigger productivity gains to materialize as businesses integrate AI tools and redesign their processes,” he said.
He also acknowledged that the technology’s spread will affect jobs, particularly as more businesses adopt generative AI tools. While AI could create new opportunities and support higher living standards through productivity gains, Macklem noted that many workers remain concerned about being displaced. “Past innovations have generally created more jobs than they eliminated, but that doesn’t mean the transitions are easy,” he said.
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