Canada’s economy could experience significant growth by 2035 if businesses accelerate their adoption of artificial intelligence and respond effectively to the challenges posed by climate change, according to a new report from PwC Canada.
The study, released Wednesday, explores strategies to unlock long-term economic growth and forecasts that Canada’s GDP could reach up to $3.65 trillion by 2035—up from $2.89 trillion in 2023—if bold actions are taken to close the AI adoption gap and foster innovation.
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PwC outlines three potential growth scenarios, each shaped by how rapidly key industries adapt to technological change, climate threats, demographic shifts, and geopolitical uncertainty. These factors are increasingly blurring the lines between traditional economic sectors.
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The most optimistic scenario predicts a 9.3% GDP increase above baseline expectations, driven by widespread AI adoption, strong public trust in cybersecurity, and international cooperation. However, this outcome depends heavily on a favorable global environment and Canada’s ability to integrate AI across strategic sectors like mining, technology, and defence.
Nochane Rousseau, national managing partner at PwC Canada, said he believes the high-growth scenario is achievable but acknowledged that Canada is currently lagging in AI adoption. “Given Canada’s economic conditions and uncertainty around tariffs, some companies are holding back on necessary investments,” Rousseau said.
The report notes that AI adoption in Canada is currently around 75% of the U.S. level, based on survey data.
Under a middle-ground scenario, where AI adoption remains sluggish and global climate efforts fall short, Canada’s GDP could still grow by 6.9% above baseline, reaching $3.57 trillion. In the least favorable scenario—marked by persistent geopolitical tensions and low public trust in technology—GDP growth would be limited to 2.1% above baseline, or $3.41 trillion.
Despite Canada’s early leadership in AI research, Rousseau emphasized the country’s ongoing struggle to commercialize those innovations. Bridging the AI gap, the report suggests, will require increased private-sector investment in R&D, government support, and new approaches to scaling technological solutions.
Even in the best-case scenario, Canada’s growth would trail that of the U.S., where GDP is projected to rise by up to 14% above baseline over the next decade. Rousseau attributed this difference primarily to slower AI uptake among Canadian businesses.
He said Canada’s path to stronger growth lies in collaboration across industries, paired with supportive public policies. As companies adapt to shifting trade dynamics, they will also need to reallocate resources to meet evolving demands in sustainability and technology.
The report also highlights how some companies are already pivoting—entering adjacent markets or entirely new sectors. For instance, some large corporations are moving into nuclear energy to meet the power needs of data centres, a move that reflects the kind of bold cross-sector strategies that could fuel Canada’s future growth.
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