Data centre development is ramping up in Canada, with the giant facilities meant to power AI cropping up across the country. While the US has already spent several years building out the infrastructure behind the AI revolution, Canada is just now beginning to crest the wave of the data centre expansion boom.
While data centres aren’t new, the AI-enabling hyperscalers making daily headlines present a new set of challenges for policymakers.
Mordor Intelligence, a market research company, pegs Canada’s data centre market at nearly $14 billion USD ($19 billion CAD). That figure is poised to more than double by 2031, particularly as Canada focuses on its digital sovereignty amid escalating tensions with the US, which has historically housed much of Canada’s data.
While data centres aren’t new, the AI-enabling hyperscalers making daily headlines present a new set of challenges for policymakers, including grid reliability, environmental impacts, and increased energy costs, all of which have contributed to strong public opposition in many jurisdictions.
To help us understand how these hyperscalers are being built and approved, BetaKit looked into the different ways Canada’s federal, provincial, and territorial governments are approaching data centres. We broke the different approaches down into four categories: those that have policies aimed at attracting or simplifying data centre development; those that have no standalone data centre policy; those that have a mixed approach; and those actively disincentivizing development.
While these governments hold a lot of sway over how, when, and where these data centres are built, it’s important to note that in many cases approval is a multi-pronged process that includes buy-in from municipalities, utility operators, Indigenous stakeholder groups, environmental agencies, and, in some cases, the courts.
Before looking at provincial approaches, however, it is important to note how the federal government is approaching data centre development.
Canada’s federal data centre framework
The feds are the latest order of government to issue a formal policy framework for data centre development. Last week, AI Minister Evan Solomon announced Ottawa’s Responsible Data Centre Development Principles, a set of guidelines intended to support the domestic data centre buildout being pursued by the Canadian government as part of its AI strategy, while also addressing concerns from the public around potential impacts of that buildout.
The framework includes five pillars developers are asked to meet, including that development create lasting local benefits; that electricity costs do not fall to Canadians; that developments “minimize water use and environmental impact”; that developers are transparent about impacts; and that developments bring “strategic value” to Canada.
Image courtesy Evan Solomon on X.
The guidelines are not binding and will not be enforced by the federal government, but are instead intended to act as a framework for provinces and municipalities to set their own legislation.
The document has been supported by 23 signatories, including OpenAI, Anthropic, Bell, Telus, Amazon, Cohere, Microsoft, and Meta.
Targeted policies: Alberta, Ontario, Saskatchewan, New Brunswick
Alberta
Arguably Canada’s most AI-forward jurisdiction, Alberta began planning its official data-centre policy back in 2024—an epoch ago in AI terms—with the Artificial Intelligence Data Centres Strategy. The strategy’s goal is to “secure the province’s position as the most attractive place to build AI data centres in North America.”
Under its framework, Alberta has sought to leverage the province’s vast natural gas reserves, cold climate, and laissez-faire regulatory environment to attract global interest, with a stated goal of bringing $100 billion in data centre investment to the province by 2030. It’s even gone so far as to create what it calls the “data centre concierge service” to streamline the application process through one provincial point of contact.
For its trouble, Alberta will collect a two-percent levy on data centre value, with applicants also paying property taxes and royalties on natural gas. The Province is also giving preference to operators that supply their own power.
That strategy seems to have worked: earlier this year, Alberta landed Canada’s largest data centre development deal, and AI giant Anthropic is reportedly eyeing the province for its Canadian buildout, with dozens of other projects in development. Despite its successes, there’s also been pushback from community groups, and concerns from the Alberta Energy System Operator (AESO), which oversees connections to Alberta’s grid. Most recently, a power plant to power a data centre planned for Olds. Alta., was rejected by the AESO after the utility operator said the site location didn’t meet framework standards and expressed concerns over noise, pollution, and community opposition.
Ontario
Last month, Ontario launched its Data Centre Playbook, a proposed framework for how large data centres are developed in the province. Under that framework, which is open for public consultation until Sept. 12, Ontario proposes charging data centres that pull more than one megawatt of electricity a premium by placing them in a new rate class, as a way to offset potential increases in electricity costs for existing customers. It also proposes “non-financial” supports like faster permitting and “white glove service” to incentivize investment.
Framed as an early part of Ontario’s coming AI strategy, the Data Centre Playbook is built across three pillars: advancing economic development, protecting data sovereignty, and investment in communities. The playbook stipulates that Ontario will only consider projects that “accelerate economic growth” and prioritize Ontario’s interests. Additionally, applicants must ensure Canadian data is safeguarded on domestic servers, and that communities that house data centres receive financial and non-financial investment from applicants in an effort to develop public trust.
Saskatchewan
Canada’s breadbasket announced its strategy, dubbed the Data Centre Framework, in late August. Under that framework, six key principles will guide development decisions. Data centres developed in Saskatchewan must have Canadian ownership, de facto closing the door to many of the US tech giants that have courted neighbouring Alberta.
Other principles borrow from both Alberta and Ontario’s guidelines, including encouraging developers to invest in self-supplied power generation, the centralization of a provincial intake process, and requirements around data storage sovereignty. Saskatchewan has claimed there are more than 30 data centre projects currently being evaluated under the process.
New Brunswick
An outlier among Maritime provinces, New Brunswick has seen more data centre interest than its neighbours, including a 390-megawatt facility planned for Lorneville, NB, spearheaded by Calgary’s Beacon Data Centres and the Texas-based VoltaGrid. That project has spawned controversy, including calls for a provincial moratorium from one MLA. New Brunswick’s government has not heeded those calls. Instead, on Sept. 1, it released a policy framework to guide development.
Image courtesy Beacon Data Centres.
New Brunswick’s framework, which the Province is seeking input from the public on until Oct. 2, follows a similar pattern to other provincial strategies, including mandating that new data centres pay for any increased utility costs. It’s also designed to minimize environmental impact and says “meaningful engagement” with local governments and Indigenous communities is required throughout development. The framework also states that the Province will assess developments on the economic benefits data centres bring to New Brunswick, including job creation and workforce training.
To facilitate development, New Brunswick said it will apply a common approach across government departments and agencies while evaluating proposals, but stipulated that no financial support or incentives, including land transactions below fair market value, would be provided “unless authorized by government policy.”
No standalone policies: Nova Scotia, PEI, Newfoundland, and the Territories
Nova Scotia
Nova Scotia does not currently have a standalone data centre policy, due in large part to the fact that the Maritime province is not actively pursuing data centre development, according to comments from Premier Tim Houston earlier this summer. Houston told reporters during a cabinet meeting last June that the province lacked the energy capacity to take on such projects, but said that in a hypothetical situation where development was on the table, the province wouldn’t commit to development unless Nova Scotia’s grid was safeguarded and full evaluations carried out.
While Houston said there are no active proposals in Nova Scotia, he said any future projects would likely not be prioritized until other power-generating projects in the province are fully operational.
Prince Edward Island (PEI)
Data centres will not be sharing a home anytime soon with Anne of Green Gables. Atlantic Canada’s island province lacks the geographic space, municipal water supply, and grid capacity to develop hyperscale data centres, contributing to the lack of a formal policy to guide development. Despite this, rumours spread last June after Charlottetown Mayor Philip Brown asked a hypothetical question during a committee meeting about water capacity in the event of a data centre development. Those rumours were unsubstantiated, and Brown said the City has received no data centre-related requests.
Newfoundland & Labrador
Newfoundland and Labrador does not have a standalone provincial policy governing data centre development, instead managing potential developments through Newfoundland and Labrador Hydro on a case-by-case basis, much in the same way any large-scale industrial project would be assessed. The province is not home to any hyperscale projects yet, but Labrador is home to several smaller data centre operations, including cryptocurrency mining data centres. The Canadian lobbying organization Capital Hill Group has reported that interest in Labrador as a location for data centres could grow in the future, given its cool weather and hydroelectric capabilities.
The Territories
Cold and sparsely populated, Canada’s vast northern territories seem an ideal location to build a hyperscale data centre—until you consider the stumbling blocks that are its lack of grid infrastructure and capacity. For most of Canada’s isolated North, energy is generated independently of the rest of Canada and dispersed through small microgrids. In Nunavut, the Qulliq Energy Corporation manages 25 separate diesel-powered microgrids, while the Yukon and Northwest Territories manage more that are fuelled by hydroelectric power and diesel. Because of their relatively small populations, vast geographies, and disconnection from the North American network, there is limited electrical capacity, meaning data centre feasibility hinges first on the development of supportive infrastructure. As such, no formal policies have been drafted by territorial governments at this time, but hypothetical deals would likely require unique partnership agreements with Indigenous stakeholders and land-rights holders.
Mixed approach: BC, Quebec
British Columbia
This past summer, telecom giant Telus announced a trio of hyperscale data centres in BC’s Lower Mainland, including one in downtown Vancouver. With its abundance of hydroelectric power, the province is no stranger to data centre interest. To manage that interest, BC is using a competitive bidding process, alongside provincial utility operator BC Hydro, to “manage rising electricity demand and support balanced development.”
Enabled under the Energy Statutes Amendment Act, data centre applicants must participate in a competitive selection process that’s not required for traditional industries, such as mining or forestry, that are looking to connect to the grid. Part of BC’s Look West strategy, which names AI and quantum computing as priority development sectors for BC, the bidding process assesses projects based on price and data sovereignty, and is meant to prioritize access to BC’s electricity grid for projects the Province thinks have long-term economic, community, and environmental benefits.
Québec
Quebec’s approach to data centres has undergone a period of rapid transition in recent years. During the pre-AI era, the province marketed itself as a hub for data centres due to its inexpensive hydroelectric power and robust workforce. It has in the past attracted investment from Google, Microsoft, Amazon, and IBM, with data centre applications traditionally handled by Hydro-Québec.
But Québec’s approach has shifted under the weight of increased demands from a rapidly growing sector. In 2023, the province passed requirements that data centres drawing more than five megawatts of power require ministerial authorization. The same goes for any cryptocurrency operations drawing more than 50 megawatts. In 2025, the province went further, passing Bill 69, which expanded provincial control over electricity allocation for large-scale projects.
Those changes have resulted in a stricter and more expensive process, including the implementation of higher tariffs directed at data centres and cryptocurrency operations specifically. The tariffs, which average out to roughly 13 cents per kilowatt hour—nearly double the rate other large-scale power users pay—have been challenged in both Québec’s superior court and through the Régie de l’énergie, Québec’s regulatory tribunal for the energy sector.
Those challenges, which are still underway and which include a who’s who of participants including Google and a coalition of data centre stakeholders, argue that Québec overstepped its authority in directing the Régie de l’énergie to consider new pricing categories for data centre and crypto firms.
Policies disincentivizing data centres
Manitoba
Manitoba may have the most unique approach to data centres in the country. The Prairie province has actively worked to disincentivize large-scale data centre development within its borders, rejecting a hyperscale project earlier this year and citing concerns over environmental impacts and skepticism about the economic benefits.
This year, Manitoba’s legislature passed two bills to aid in this effort. Bill 20 allows Manitoba Hydro to categorize data centres and crypto mining operations in unique power categories, letting the utility put restrictions on power usage during peak times. Meanwhile, Bill 39 allows Manitoba to impose financial levies against data centres of up to 100 percent more than standard industrial users. Cabinet also has the power to veto large-scale projects on a case-by-case basis, which it utilized earlier this year to halt a hyperscale facility in Île-des-Chenes. In 2022, the province also paused all crypto mining operations from connecting to the provincial electricity grid.
Rather than pursuing large data centre developments, Manitoba’s premier, Wab Kinew, said the Province is focused on other kinds of nation-building projects, adding that Manitoba is still open to small-scale projects.
Feature image courtesy Image courtesy Meta.
The post Here’s how every Canadian province and territory is governing data centres first appeared on BetaKit.
