Data Center Builders, Increasingly Shunned in America, Find a More Welcoming Climate in Canada

TORONTO — AI companies, facing growing hostility to the construction of their sprawling, energy-hungry data centers in America, are increasingly looking to Canada where Prime Minister Mark Carney is welcoming them with open arms.Apart from a more favorable political climate than in America — where at least 38 ballot initiatives slowing or pausing the development of data centers were approved in Tuesday’s midterms — the companies are attracted by Canada’s cooler climate, ample open spaces, and abundant cheap renewable energy, much of it from hydro-electric power.Mr. Carney’s government, which has made the pursuit of foreign investment and digital independence key to its response to the trade war with the United States, laid out its ambitions in an AI policy document last updated at the end of October.Describing data centers as “critical infrastructure” that supports health care, financial services, research and secure government systems, the document outlines principles intended to provide “a clear, sustainable path forward for the world’s leading technology companies to invest in Canada. By partnering with global innovators who commit to our principles of clean energy and community benefit, we are ensuring Canada becomes the premier destination for the next generation of global AI infrastructure.”Canada is starting from a relatively low base, with only five hyperscale data centers — using 50 megawatts of electricity or more — but is rapidly expanding with 159 more planned or under construction, according to an industry newsletter, Energy Connects. It says a surge in the computer parts used for data centers pushed imports of American goods to a record high in June.Meta broke ground in July for its first Canadian data center, a $9.7 billion AI-optimized campus to be located in the energy-rich western province of Alberta, where it will be powered by a dedicated new natural gas plant. The total campus will cover almost 3 square miles outside of Edmonton, with 2.9 million square feet of floor space for the data center buildings themselves. At peak capacity it will use up to 1 gigawatt of electricity — enough to power 750,000 to 1 million homes. That may be just the start for Alberta, which has laid out plans to attract more than $70 billion in data center construction over five years and offers the companies a “concierge service” to ease the approvals process. Elsewhere, several Canadian provinces can offer the power-hungry data facilities a stable and reliable source of inexpensive, carbon-free energy: Quebec and British Columbia generate more than 98 percent of their energy from hydro-electric plants while Ontario generates more than 90 percent from a mix of nuclear, hydro, wind and solar. Cooling costs are further reduced by Canada’s northern climate.The lure of Alberta is perhaps fitting, given the province’s frequent comparisons to Texas, which currently has America’s largest number of active data centers, consuming about 10.5 gigawatts of power. But ambitious plans to build out centers in the Lone Star state have been cast in doubt by Tuesday’s midterm elections, which put a skeptical new Democratic administration in the state capital. In post-election remarks, Governor-elect Gina Hinojosa called for an extension of an existing data center moratorium in the state, to be followed by tighter regulation.In Virginia, which rivals Texas for the largest concentration of data centers, Governor Abigail Spanberger has cut off state site development subsidies or fast-track permitting for all data centers larger than 25 megawatts, and a bill expected to come up in the next legislative session would ban all data center permits through July 2030.Despite the Carney government’s fulsome support, Canada is not immune to the same public misgivings about data centers being experienced in the United States. Oakville, a small city neighboring Toronto, has imposed a one-year moratorium on the facilities, as has a large suburban county outside Calgary, Alberta. The premier in the largely agricultural province of Manitoba has also vetoed one project.Concern is also rising among Canada’s First Nations, as its indigenous peoples are known, whose treaty rights are often impacted by the sprawling campuses and related infrastructure. In some cases, those concerns have been mitigated by giving the First Nations an ownership stake in the projects.In its policy framework laid out last month, Mr. Carney’s administration sought to ease public concerns by demanding that future projects create lasting local benefits, limit environmental impacts and ensure that electricity costs are not pushed onto residents. Those principles have already been endorsed by Amazon, Meta, and Anthropic, among others.

Data Center Builders, Increasingly Shunned in America, Find a More Welcoming Climate in Canada

Data Center Builders, Increasingly Shunned in America, Find a More Welcoming Climate in Canada

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