Canadian business leaders are investing heavily in artificial intelligence (AI) as a key strategy to drive productivity and build resilience amid ongoing economic uncertainty, according to KPMG in Canada’s 2025 CEO Outlook.
The annual survey found that 78 per cent of Canadian CEOs identified AI as their top investment priority, closely aligning with 71 per cent of global CEOs. Similarly, 83 per cent of Canadian executives from medium-sized firms also ranked AI as their main focus in a separate KPMG study.
“Canadian CEOs are turning to new tools to redefine success and transform their business at a time when stickhandling through heightened uncertainty becomes increasingly more difficult,” said Benjie Thomas, chief executive officer and senior partner, KPMG in Canada. “The challenge is, being disciplined in their capital deployment to ensure AI aligns with their business strategy, implemented appropriately and integrated into their operations to ensure material productivity gains. This can’t be done without employee buy-in, training, and literacy.”
Benjie Thomas
According to Statistics Canada, both labour productivity and overall business investment declined in the second quarter of 2025.
“It’s impossible to move the dial on productivity without addressing business investment, which is why it’s encouraging to see CEOs invest in AI tools that can reverse productivity declines,” Thomas said.
The report showed that 73 per cent of Canadian CEOs plan to allocate between 10 and 20 per cent of their budgets to AI over the next 12 months. In comparison, 69 per cent of global CEOs reported similar spending plans. ‘Understanding and implementing AI’ was cited as the top operational priority by Canadian CEOs for the next three years.
Thomas said leaders are increasingly focused on transformation and agility.
“Canada is entering a pivotal time as it rewires its economy and AI transforms business,” he said. “CEOs recognize that to build a prosperous and vibrant country starts in their own organization at the very top with their ability to lead and inspire their teams to accelerate innovation and growth. The time for complacency is over.”
While 78 per cent of Canadian CEOs said they are rethinking employee training in the AI era, only 17 per cent felt their organization is prepared to upskill their workforce to fully leverage the technology. Among medium-sized firms, 86 per cent said they are rethinking training, but just 38 per cent believe they are equipped to upskill employees effectively.
As a result, only 16 per cent of Canadian CEOs expressed confidence in their employees’ ability to fully benefit from AI, compared with 35 per cent of executives from medium-sized Canadian companies.
Timothy Prince
“The most-successful integrations of AI start with your employees,” said Timothy Prince, Canadian managing partner for clients and markets, KPMG in Canada. “By embracing the possibilities rather than fearing the unknown, business leaders can position AI as more than just a productivity tool – it can help transform the organization by enhancing and expanding the abilities, creativity and impact of employees and driving innovation.
“Those who approach uncertainty with imagination and curiosity will unlock AI’s full potential; not only streamlining operations, but also sparking bold solutions to complex business and societal challenges.”
Prince added that AI is already transforming industries in areas such as supply chain resilience, cybersecurity, fraud detection, personalized customer experience, disease diagnosis, urban planning, emissions tracking and energy optimization.
Supply chain resilience was identified as the leading short-term pressure for Canadian and global CEOs. Other key challenges for Canadian leaders included regulatory pressures, cybersecurity, AI ethics and governance, and integration of AI into systems and processes.
“It’s a tough environment, with a lot of uncertainty for businesses whether it’s from trade relations to the next cyberattack to emerging technologies like AI and quantum computing to new regulations,” said Prince. “The natural reaction to uncertainty is to pause investments but what we’re hearing from our clients and what the surveys bear out is that they are continuing to invest in areas that will make them stronger, more agile and ultimately more resilient.”
To address these risks, Canadian CEOs said they plan to increase investments over the next three years in areas such as cybersecurity, regulatory compliance, innovation, AI integration and supply chain continuity.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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