(Bloomberg) — The data center backlash that has gripped US politics is spreading north, complicating Prime Minister Mark Carney\u2019s efforts to attract investment in the rapidly expanding artificial intelligence infrastructure.<\/p>\n
In many respects, Canada is an alluring alternative for Silicon Valley firms: it has a cooler climate, abundant energy resources and plenty of open land. But a growing number of Canadian communities are looking to slam the brakes on server farm projects.<\/p>\n
Two municipalities \u2014 Oakville, Ontario and Rocky View County, Alberta \u2014 have implemented one-year moratoriums on data center developments. In the sparsely-populated province of Manitoba, Premier Wab Kinew vetoed a project that would have been built outside of Winnipeg, saying the drawbacks outweighed the benefits.\u00a0<\/p>\n
A huge 7.5 gigawatt proposal by Canadian entrepreneur and personality Kevin O\u2019Leary has also sparked pushback, while protestors have marched against data centers proposed in Vancouver which have been championed by all levels of government.<\/p>\n
The Canadian hesitancy mirrors the skepticism toward data centers that has led to hundreds of local bans in the US, as well as a statewide moratorium in New York. Supersized data centers are loud and energy-hungry, and many people are still not convinced about the benefits of AI the facilities are meant to support.<\/p>\n
Photographer: Ethan Cairns\/Bloomberg<\/p>\n
Carney and other government officials have also presented data centers as an opportunity to bolster the country\u2019s digital sovereignty. But tech policy critics warn that efforts to store Canadians\u2019 data domestically aren\u2019t always a protection against US influence, while the economic benefits of these projects may be more modest than some claim.<\/p>\n
Although the number of local bans in Canada is limited for now, public polling suggests the hesitancy is more widespread. An Angus Reid Institute poll found 68% of respondents would oppose a large AI data center near their home, while a survey by Leger found four in five respondents said they\u2019re concerned about potential increases to electricity bills and environmental impacts.<\/p>\n
Two of the three petitions with the most signatures gathered to submit to Canada\u2019s House of Commons are calling for a stop to data centers. The left-wing New Democratic Party is calling for a nationwide pause.<\/p>\n
\u201cI don\u2019t think their concerns are groundless, but I don\u2019t think we can put the brakes on progress,\u201d said Jim Balsillie, the former head of BlackBerry Ltd., who has become an outspoken advocate for Canadian technological sovereignty.<\/p>\n
Canadian Advantage<\/p>\n
Canada\u2019s AI data center expansion is still in its early stages, but it\u2019s poised to ramp up fast. Recent research from Toronto\u2019s York University shows there are only five operational hyperscale data centers, defined as 50 megawatts or above, but 159 more are announced or under construction. That push is also showing up in trade data: Canadian imports of US goods hit a record high in June driven by a surge in the computer parts used for data centers.<\/p>\n
The federal government argued in its AI strategy that Canada is \u201cuniquely positioned to lead in building this infrastructure responsibly and sustainably.\u201d\u00a0<\/p>\n
\u201cAs demand for AI compute grows, Canada\u2019s approach will be to link new data center development with clean energy expansion, robust environmental standards, and tangible benefits for local communities,\u201d the document said.<\/p>\n
Balsillie said the challenge with data centers is that, unlike other forms of capital investment, they don\u2019t necessarily spur the same kind of economic benefits to people, while the negative spillovers can be material for communities.\u00a0<\/p>\n
\u201cIt\u2019s a fine line between being strip-mined for low value-add, metaphorically, and capturing high value-added sovereign participation in this era of AI,\u201d Balsillie said.<\/p>\n
Carney\u2019s government unveiled a framework on Thursday to help guide communities\u2019 decisions on data center development. It said such projects must create lasting local benefits, limit environmental impacts and ensure electricity costs are not pushed onto residents. Tech giants including Amazon.com Inc., Meta Platforms Inc. and Anthropic PBC signed on to the principles.<\/p>\n
BCE Inc. Chief Executive Officer Mirko Bibic applauded the framework, which he said acknowledged the critical nature of AI infrastructure and the need for more domestic compute capacity.<\/p>\n
\u201cOn the other hand, there\u2019s an acknowledgement that while we do that, we need to engender trust amongst all stakeholders in the country \u2014 citizens, communities, investors,\u201d Bibic said in an interview Friday on BNN Bloomberg.<\/p>\n
Provincial governments are also trying to address concerns surrounding energy costs. British Columbia is restricting electric grid use for data centers and forcing operators to compete for access.<\/p>\n
Energy-rich Alberta\u2019s government has been particularly bullish about data centers and attracted the bulk of Canada\u2019s proposals. Nonetheless, it\u2019s stipulated operators must supply their own power. The province will be home to a C$13-billion ($9.4 billion) Meta data center, set to be the largest in the country.<\/p>\n
Even so, an analysis by the Pembina Institute suggested Albertans could see their electricity bills rise by as much as C$460 per year, because the centers would be allowed to connect to the grid before their own generation comes online. The Brookings Institute found data centers create a modest amount of jobs and workers see no wage gain, while home prices tend to rise by 2-5% in communities that harbor the infrastructure.\u00a0<\/p>\n
\u201cCanada has always been seduced by this promise of jobs, and we\u2019ve given away a lot historically in the past in order to get jobs here. And data centers don\u2019t really have that promise,\u201d said Vass Bednar, managing director of the Canadian Shield Institute, a public policy think tank.<\/p>\n
The Trump Factor<\/p>\n
Federal and provincial officials have also pitched data centers as a necessity to bolster Canada\u2019s sovereignty at a time when tensions are high with the US.<\/p>\n
\u201cOntario has a choice: we can build the economy of the future and ensure Canadians\u2019 data stays in Canada and out of President Trump\u2019s hands, or we can get left behind and risk Canadians\u2019 data being sent down to the US,\u201d Premier Doug Ford said in August.<\/p>\n
But Balsillie said holding Canadians\u2019 data domestically doesn\u2019t necessarily protect it from the Trump administration. Under the Cloud Act, US law enforcement can compel American tech companies to hand over electronic data, regardless of where it is stored.<\/p>\n
\u201cIt\u2019s not sovereign if you haven\u2019t got sovereign governance,\u201d he said.<\/p>\n
The US-Mexico-Canada Agreement, signed in 2020, also blocks some restrictions on cross-border information transfers.\u00a0<\/p>\n
That complication applies to the supply chain, too. Balsillie argued that CoreWeave Inc., a New Jersey-based company, is in line to receive a portion of federal funding for \u201csovereign\u201d computing infrastructure, awarded to Cohere Inc., a Canadian AI company. The government declined to comment and CoreWeave didn\u2019t respond to a request for comment.\u00a0<\/p>\n
Cohere spokeswoman Amanda Taggart said: \u201cTraining frontier models requires highly specialized infrastructure, and at the time no Canadian vendor had the experience, timelines or chipsets required to train large language models from scratch at this scale. Those capabilities are still developing in Canada, and we want to help build them. That effort is already underway, and we look forward to sharing more soon. In the meantime, we are working with partners from across the world in order to continue our growth and build a generational AI company from Canada.\u201d<\/p>\n
Patrick Searle, the head of the Council of Canadian Innovators, which represents tech CEOs in the country, said in a statement that there are \u201cactive conversations ongoing between government and industry exploring how to build digital infrastructure in a way that responds to public concerns.\u201d<\/p>\n
\u201cAt the same time, this is increasingly an issue of economic sovereignty,\u201d he added. \u201cAs compute becomes increasingly important to our economy, national security and competitiveness, Canada needs sufficient infrastructure and technological capacity here at home.\u201d<\/p>\n
(Updates with Cohere comment and government declining to comment from fourth-to-last paragraph.)<\/p>\n
\u00a92026 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — The data center backlash that has gripped US politics is spreading north, complicating Prime Minister 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