Ottawa issues guidelines for building data centres as local opposition grows

More than 20 artificial intelligence and digital infrastructure companies including OpenAI and Anthropic have signed on to a new federal government framework for data-centre development, as local opposition to these facilities grows.

Federal Artificial Intelligence Minister Evan Solomon announced five broad principles for data centres on Thursday at an event in Markham, Ont. Developers must minimize water use and other environmental impacts, be transparent about local impacts and not shift electricity costs onto Canadians. Developers must also create “lasting local benefits” and bring “strategic value” to the country.

The government said it is meant to “complement existing provincial, territorial, municipal and Indigenous regulatory processes by setting a national recognized baseline,” according to a news release.

American cloud providers Amazon Web Services AMZN-Q, Microsoft MSFT-Q and Google GOOGL-Q have signed on, along with Meta Platforms Inc. META-Q, which is building a $13-billion data centre complex in Alberta. Cohere Inc., Bell Canada BCE-T and Telus Corp. TU-N are also signatories.

Some regions of Canada have seen an influx of data-centre proposals as demand for AI continues to skyrocket. Opposition is growing at the same time, with some Canadians concerned about electricity costs, water consumption, noise and the loss of land. Data centres have also become a focal point for general anxieties about AI and the dominance of massive technology companies.

Provinces such as Quebec, Ontario and British Columbia have already been taking a more rigorous approach to data-centre development, particularly when it comes to allotting electrical capacity.

The Ontario government put forward a development playbook in August, proposing to charge data centres a higher electricity rate. That follows legislation last year requiring that data centres meet certain criteria related to local economic benefits and digital sovereignty in order to connect to the electrical grid.

Municipalities have taken action as well. Oakville, Ont., introduced a one-year moratorium in August, while council in Mississauga will vote on one later this month.

Ottawa has been encouraging data-centre development for the past couple of years, particularly as a way to strengthen digital sovereignty and ensure that Canada has more control over the infrastructure that powers cloud computing and AI, along with the data that is housed at these facilities.

A recent Nanos poll conducted for The Globe and Mail found that the digital sovereignty message is not strongly resonating with Canadians, however. Only 8.2 per cent of respondents listed data sovereignty as a top benefit, while 6.5 per cent cited national control over infrastructure as an advantage.

Opinion: How Canada can overcome the backlash against AI data centres

The public backlash to AI data centres could also prove to be a political vulnerability for some elected officials. Federal NDP leader Avi Lewis, for one, has seized on public sentiment and called for a pause on new construction.

AI has become a flashpoint in some U.S. elections, too. Pennsylvania Governor Josh Shapiro issued an executive order in August to block “speculative, irresponsible” developments, while his opponent for re-election, Stacy Garrity, said it was “damage control” after “rolling out the red carpet” for developers.

Alberta’s government has courted data centres too, in part because the province has abundant supplies of natural gas to produce electricity. As part of Meta’s efforts to engender goodwill in the province amid its data-centre build out, the social media giant is spending $60-million on infrastructure upgrades and providing grants to local non-profits.

Anthropic, the San Francisco-based company behind the Claude chatbot, could have its eye on Alberta, too. Anthropic recently posted a job for someone to lead the company’s compute strategy in Canada and ultimately bring “gigawatts of compute online” here. It’s also hiring for a data-centre community engagement manager based in Alberta to make the company “a trusted, visible, and valued neighbour.”