Frontiers in Tech
Issue #3 | July 2026
By: Billy Truong, Shravya Verma, Stephany Laverty
From streaming a World Cup game to binging a Netflix series to asking ChatGPT a five-second question, almost everything we do online runs through a data centre, and Western Canada is racing to become the place where that technology infrastructure lives.
Companies across various industries use data centres to train and operate artificial intelligence systems. As digital capabilities expand, so does the demand for data. In 2025, the total volume of global data usage reached 173.4 zettabytes, which is expected to climb to 527.5 zettabytes by 2029, an increase of 204 per cent. Data centres are a key component of meeting that demand but require significant amounts of power, water and land.
Western Canada has emerged as one of the most attractive locations for data centres due to its reliable supply of renewable energy, deregulated electricity market, favourable climate, lower cost of land and competitive tax rates. Adding to a growing list of AI-related projects in Western Canada, on July 8, Meta announced plans to build a data centre worth C$13 billion in Alberta, representing one of the largest private-sector investments in Canadian history. The project is expected to create more than 3,000 construction jobs, 300 operational jobs and generate approximately C$250 million annually in benefits for Albertans through royalties, taxes, levies and fees. Companies such as Amazon Web Services (AWS) and Telus are also investing heavily in Canada’s data centre market.
As Western Canada attracts investments to bring potential data centre projects to reality, community members raise concerns over whether the benefits outweigh the risks and if these risks can be sufficiently mitigated for projects to move forward.
Benefits beyond data
Along with increased data capacity, data centres can bring high capital investment worth billions of dollars and generate temporary and long-term employment. A joint project between Telus and the Government of Canada to invest in three data centres in British Columbia will create an estimated 1,000 jobs during the construction process and 525 jobs upon completion. Meanwhile, the Government of Alberta plans to recognize data centres as designated industrial properties, which will increase local revenues through levies and taxation. This additional income is over and above resource revenues from water and electricity consumption.
Data centres support technology sector development and help Western Canada attract AI firms, cloud computing services, research institutions and highly technical workers, which are key components of a strong digital economy. Reducing dependence on foreign computing infrastructure, would strengthen Canada’s digital sovereignty because Canadian data could be kept inside Canada’s borders rather than housed in other countries and subject to foreign laws governing data security and access.
Concerns: Electricity, water and land use
The benefits of data centres for the tech industry are clear, but for the communities where they are built, there are notable risks related to energy, water and land use.
Data centres consume electricity at high rates. The demand for power from proposed projects in Alberta exceeds peak capacity by almost double. Although there are limited Canadian examples, utility bills in the United States increased by 30 per cent from 2021 to 2026, with data centres cited as one of the reasons behind the increase. The January 2026 long-term outlook from the North American Electric Reliability Corporation (NERC) identifies data centres as the reason “for most of the projected increase” in electricity demand over the next 10 years.
Data centre water usage also poses a significant concern. A large data centre can consume up to five million gallons of water per day. This is comparable to the daily usage for a town of 10,000 to 50,000 people, which creates challenges in water-stressed regions, such as southern Alberta. Critics have also raised questions about the absence of mandatory environmental assessments for several large data centre projects. Part of the appeal of Western Canada’s northern communities is that cooler temperatures can reduce water consumption. However, power air circulation systems increase electricity demand.
Several communities have pushed back over concerns that data centres will take land away from, or negatively impact, other land-based sectors, such as agriculture. This is because data centres are usually built with upscaling in mind, which requires large tracts of land. In 2025, Rocky View County, located outside of Calgary, rejected a proposed data centre complex because of the impact on farmland.
Regulators at the crux
As interest in making Western Canada a data centre hub grows, so does the need for strong governance frameworks to help mitigate potential risks. Federal, provincial and municipal governments have jurisdiction over different aspects of data centre projects. For example, the federal government is responsible for national security and defence, whereas both the provincial and federal governments regulate data privacy. Typically, projects need to meet only the provincial and municipal regulatory requirements, such as electricity, water and land use, unless data privacy or national security considerations arise.
Provincial governments regulate electrical grids. Across Western Canada, each province has developed its own structures for governing energy use at data centres based on its unique needs and resources. For example, British Columbia manages electricity access through BC Hydro’s allocation framework, which establishes a competitive bid process for data centre projects over 10 megawatts to connect to the grid. On the other hand, Alberta uses a deregulated energy system. The province streamlines approval timelines and allows data centre companies to build their own electrical capacity. In Saskatchewan, Bell’s 300 MW facility will require close coordination across SaskEnergy, SaskPower and SaskTel to provide the requisite electricity and telecoms infrastructure. Meanwhile, Manitoba is developing a strategy framework for its growing data centre market.
In addition to governing energy use, provincial governments issue water licences to municipalities that reflect the total permissible water consumption for their regions, including all businesses and households. To avoid using too much of the permitted water supply, the Bell data centre in Saskatchewan, as well as two new data centres coming to Vancouver, will use a closed-loop system that recirculates water and reduces the amount of fresh water they need.
In Alberta, water use at the proposed Wonder Valley data centre will need to meet strict regulatory conditions before the project receives approval. The Municipal District of Greenview holds a water licence to withdraw up to six million cubic metres of water from the Smoky River each year, plus a preliminary certificate to use up to 24 million cubic metres. However, this is meant to support Wonder Valley and any future developments in the region. Estimates suggest Wonder Valley will use less than six million cubic metres annually, which is considerably lower than originally predicted. Alberta’s Ministry of Environment and Protected Areas said all applications must adhere to strict water licence terms for protecting the environment.
Municipal governments handle decisions related to permits and zoning, which often vary by jurisdiction. Although the Municipality of Sherwood approved the Bell data centre, other municipalities, such as Rocky View County in Alberta, have opted not to move forward with some data centre projects due to land use and other concerns. Council members in Hamilton, Ont., are weighing whether to put a moratorium on data centre project reviews until the city can develop a decision framework.
Municipal leaders must consider a variety of factors when assessing data centre land use, which underscores the importance of early, consistent engagement. By including communities in the conversation from the outset, developers gain more certainty, and projects move forward with stronger public support.
To help bring all interested parties together in consultation, some regulators use a negotiation tool called a Community Benefit Agreement (CBA), which is a legally binding contract. Although there are no Canadian examples, Lancaster County, Pennsylvania, was the first in North America to enter a data centre-specific CBA. It sets out constraints related to noise, land, water, air and energy use. It also specifies how project returns will be funneled back into the community through the creation of 300 jobs. The concept is not unfamiliar in Canada as a growing number of municipalities, including Vancouver, Calgary, Edmonton and Toronto, have used CBAs or similar frameworks for other infrastructure projects to help ensure mutual benefit for the community and builders.
Realizing Canada’s data centre potential
The race to power AI is quickly gaining speed, and Western Canada is emerging as a strong contender. With abundant energy and water resources, available land and significant investor interest, the region is well positioned to lead the country in the data centre space. By putting the right policies in place, it can shape the future of digital infrastructure in Canada and secure a lasting role in the global AI economy.
This issue of Frontiers in Tech was written by Billy Truong and Shravya Verma, Canada West Foundation summer interns, and Stephany Laverty, a senior policy analyst. If you have any developments you’d like to see featured or topics that you think should be covered, please send them to Margi Pandya, at pandya@cwf.ca.