The Coming Disruption: Automation and the Labour Market
In the next 5–10 years, artificial intelligence (AI), robotics, and automation are expected to dramatically reshape work in G7 nations, including Canada. Studies estimate that 27% of jobs in OECD countries involve skills that could easily be automated with today’s AI [1]. The IMF warns that 40% of jobs globally, and over 50% in advanced economies, are exposed to AI disruption, particularly cognitive tasks like data analysis, customer service, and even parts of legal and medical work [2].
Goldman Sachs estimates 300 million jobs worldwide could be affected by automation in coming years [3]. Still, most roles won’t disappear overnight. Many jobs will be augmented by AI rather than replaced with routine tasks automated, and humans focusing on decision-making, creativity, and interpersonal work [3].
However, disruption will be uneven. Lower-skilled and routine-heavy jobs are most at risk, while higher-educated workers in creative or people-centric roles may benefit from productivity gains [4].
Which Jobs Are Affected the Most?
Manufacturing Jobs
Automation in manufacturing is well underway. Robotics now handle repetitive assembly, inspection, and packaging. The share of time spent on manual tasks in manufacturing is expected to drop from 50% today to 35% by 2030 [5]. Industrial robots are getting cheaper (robot costs are down 65% from 2015 to 2025), while labor costs rise, pushing firms to automate faster [5].
G7 countries like Germany and Japan already lead in robotics adoption. Canada lags slightly behind but is catching up. Analysts estimate 37% of Canadian manufacturing jobs have high potential for automation by the 2030s [6].
Service Sector Jobs
AI is now creeping into the service sector too. Self-checkouts, chatbots, voice recognition, and generative AI tools are transforming customer service, finance, HR, and even writing and design [7]. Pew Research found 19% of U.S. workers are in jobs with high exposure to AI, many of them white-collar, well-paying roles [8].
Still, some service jobs are harder to automate, think of nurses, electricians, or early childhood educators, which require emotional intelligence, judgment, or dexterity [9].
What Happens to Wages and Employment?
The big concern is inequality. When robots or AI replace tasks, workers may see wages decline or disappear. One U.S. study showed that adding one robot per 1,000 workers reduced local wages by 0.42% and employment by 0.2 percentage points [10].
Meanwhile, workers who complement AI, like engineers, analysts, and tech-savvy professionals, could see wage growth due to increased productivity [4].
So, automation doesn’t affect all jobs the same. It can cause a widening wage gap between high-skill workers and others. Some lower-wage workers may need to accept jobs with less pay or fewer benefits if their previous roles are automated [11].
How Should Governments Respond?
1. Investing in Skills and Retraining
Governments across the G7, including Canada, are pouring money into upskilling programs. Canada’s 2024 budget allocates $50 million over 4 years to retrain workers in industries likely to be affected by AI [12].
Other countries are rolling out lifelong learning programs, training vouchers, and apprenticeships to help workers shift from shrinking to growing industries [13].
2. Expanding the Social Safety Net
Not everyone will transition smoothly. That’s why policymakers are updating employment insurance systems, considering wage insurance (to help those forced into lower-paid work), and even Universal Basic Income (UBI) pilots [14].
Canada, for example, is exploring reforms based on the lessons from CERB during the pandemic to cover gig and freelance workers who may be displaced by AI [15].
3. Tax Reforms: Who Pays for the Shift?
Automation reduces income tax and payroll tax revenues, since machines don’t pay taxes. So, how do we fund public services?
Some experts, including Bill Gates, have suggested a “robot tax” on companies that replace human workers [16]. Others propose increasing taxes on capital (such as AI-driven profits) to fund training, education, and safety nets [17].
Canada and G7 partners are also implementing the 15% global minimum corporate tax to ensure multinational firms, especially highly automated tech companies, pay their share [18].
Conclusion: AI is Here. Policy Will Decide Who Wins.
Automation and AI will absolutely create new jobs, but they’ll also destroy or transform millions more. Over the next decade:
Jobs involving routine manual or cognitive tasks will shrink.
Roles requiring creativity, empathy, and adaptability will grow.
Wage inequality may widen if no action is taken.
But governments can act now to shape a more equitable future.
By investing in people, updating social protections, and ensuring that corporations benefiting from AI contribute to the public good, Canada and the G7 can turn automation from a threat into an opportunity.
📚 References
OECD Employment Outlook 2023
IMF, AI and the Future of Work, 2024
Goldman Sachs, Generative AI could automate 300 million jobs, 2023
Statistics Canada, AI Exposure in the Canadian Labour Market, 2024
McKinsey Global Institute, The Future of Work After COVID-19, 2021
OECD, Job Automation Risk by Country, 2023
World Economic Forum, Future of Jobs Report, 2023
Pew Research Center, AI and American Workers, 2023
C.D. Howe Institute, Automation and Canada’s Labour Market, 2022
Acemoglu & Restrepo, Robots and Jobs: Evidence from U.S. Labor Markets, 2020
OECD, Inequality and Automation, 2022
Government of Canada, Budget 2024 Highlights, 2024
IMF, Preparing Labor Markets for AI, 2024
Brookings Institution, What Happens if AI Displaces Jobs?, 2023
Caledon Institute of Social Policy, CERB and the Future of Social Protection, 2021
The Korea Times, Robot Tax Debate; Bill Gates interview, 2017
IMF, Taxing AI-Driven Profits and Capital, 2024
OECD, Global Minimum Corporate Tax Framework, 2022
