TD Economics sees AI-induced ‘job apocalypse’ as unlikely despite concerns

TORONTO – A new report from TD Economics says fears of widespread job losses due to AI are unlikely, saying the labour market is more poised for gradual change instead. 

Economists Rannella Billy-Ochieng’ and Thomas Feltmate said that rapid advances in generative AI technology have led to concerns that automation could replace workers en masse. 

But for a large-scale displacement to occur, the report said AI would have to be able to perform tasks autonomously, be economically attractive and be rapidly adopted across companies. 

“The current evidence collectively suggests that AI is more likely to reshape how work is performed rather than eliminate a large number of jobs outright. Therefore, the AI job apocalypse remains a risk scenario, not the base case,” the report said.

The economists said that based on its research, the fully autonomous performance of AI remains limited and that while many tasks can be automated, relatively fewer can be done so in a financially feasible manner. Additionally, the current deployment across businesses remains uneven. 

“These barriers will temper the intensity of adoption as businesses consider the benefits of reorienting workflows,” the report said.

The economists said there is little evidence of AI-related job disruptions in the economy, but the most visible signs are concentrated in industries that are more exposed to AI, such as data processing. 

Other industries may be comparatively more resilient, the report said, especially for those where AI can be more complementary rather than replace tasks outright that were being done by workers. As well, the economists said productivity gains from technological changes can also facilitate job creation. 

“The AI-led transformation will take a long time to soak into the fabric of everyday work. Yet, because it is happening gradually, it has the potential to fall under the radar for years,” the report reads. 

If the downside job-loss scenario were to occur, the economists said it could push the unemployment rate higher by 0.7 to 1.4 percentage points by the early 2030s. Additionally, if a recession were to occur alongside rapid AI proliferation, it could create even more significant job losses.

While potentially bad for the labour market, rapid AI adoption and automation of jobs could have some economic benefits.  

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In a moderate disruption scenario where AI adoption moves faster and sees broad adoption in the economy, the report expects it to lift annual productivity by 0.5 percentage points by 2031. A more severe scenario, where AI adoption and diffusion occur even more rapidly, is expected to lift annual productivity by one percentage point above baseline projections by 2031.

The report comes as some government data shows Canada’s adoption of AI is lagging compared with its global peers. 

In June, Ottawa released its long-awaited national AI strategy, which said Canada has a major adoption gap. It said less than 15 per cent of Canadian businesses use AI to produce goods or services, while the country ranks behind many others in both AI training and literacy and in public trust in AI systems.

This report by The Canadian Press was first published Oct. 1, 2026.    

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