Bank of Canada: Small Businesses Must Adopt AI to Curb Inflation

# Canada's Central Bank Warns: Without AI, Small Business Faces Inflation Risk

Carolyn Rogers, Deputy Governor of the Bank of Canada, has addressed one of the most pressing questions of modern economics: if artificial intelligence technologies remain the exclusive domain of the largest corporations, this will create a threat to the country's entire economy. Her warning carries not just concern about a technological imbalance, but specific anxiety that inflationary risks will grow as the productivity gap between large and small businesses widens.

The essence of the problem lies in a paradox of accessibility. AI develops rapidly, but its benefits are concentrated in the hands of companies that can afford large investments in infrastructure and specialists. Small shops, local manufacturers, regional services remain sidelined from the technological race, inevitably falling behind in labor productivity. The result is predictable: when one part of the market operates with superior efficiency while another stagnates, a distortion emerges that the system attempts to balance through price increases. And this very movement—the rise of inflation—concerns regulators.

The Canadian central bank views the problem not as a technological question, but as an economic imperative. When large companies use AI to optimize supply chains, reduce costs, and accelerate production, they gain a competitive advantage that allows them to keep prices lower. But if these tools are unavailable to smaller competitors, they cannot achieve the same efficiency and are forced to raise their own prices simply to survive. This creates inflationary pressure throughout the economy.

Rogers advocates for active proliferation of AI among small and medium-sized businesses not out of love for innovation, but out of macroeconomic stability considerations. When companies of any size can use technologies to increase productivity, they compete more fairly. A worker can handle a larger volume of work, processes become simpler, waste decreases. Healthy competition keeps prices within reasonable bounds, and this is directly in the interests of consumers and monetary system stability.

The regulator's position reflects an understanding that inflation is not only a monetary phenomenon. It is also fueled by structural imbalances in the economy. If access to critical technologies is distributed unevenly, this is not merely a technological injustice, but a threat to macroeconomic stability. The Bank of Canada will have to work with higher interest rates to cool inflation if its cause lies in the production inefficiency of part of the market.

This warning carries an important signal both for public policy and for business itself. Investments in democratizing AI—in programs supporting technology implementation for small companies, in training, in affordable cloud service solutions—are not charity and not simply an innovation fad. This is a tool for controlling inflation, a way to ensure a healthy economy where prices remain stable because the entire system operates more efficiently. Without this, the beautiful story of technological progress risks turning into an inflationary nightmare for ordinary people.