The Canadian financial system showed resilience amid a volatile 2025 marked by increased economic uncertainty, according to the latest systemic risk committee report by the Canadian Securities Administrators.
It found trade conflict slowed down economic activity, but economic growth exceeded earlier expectations. Indeed, Canadian investments are facing a variety of external risks impacting long-term outlooks, with the CSA specifying artificial intelligence as a significant risk.
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The organization warned an increase in the use of AI could potentially impact financial stability due to concentration of firms creating third-party dependencies for the financial system. It also noted reliance on a few AI models could negatively impact liquidity conditions and volatility.
“Canadian non-financial corporations remained broadly resilient in 2025, but higher refinancing needs in 2026 could raise the likelihood of financial stress for firms impacted by trade tensions, especially if trade tensions and the economic environment worsen,” said Stan Magidson, CSA chair and chair and chief executive officer of the Alberta Securities Commission, in a press release.