High gas prices and the Iran war may have been top of mind among American voters in this week’s midterm elections, but there was a sleeper issue at work as well that Canadians should watch carefully – unease about data centres. The giant compute facilities are powering the AI revolution and tech companies have been building them at a furious pace. Local resistance has been growing just as fast, driven by concerns about their environmental impact, effect on electricity prices and by general distrust of the elite tech bros who’ve cozied up to U.S. President Donald Trump during his second term. As Canada begins to accelerate its own data centre development, Be Giant took a look at what happened in the U.S., and how Canada could chart a different path.
How did the backlash play out in the U.S. elections?
More than half of American voters said data centres and their impact on local water and energy resources were a significant concern, according to an NBC national exit poll. How much did they care? About 23 per cent said AI and data centres were crucial to their vote, while an additional 33 per cent identified them as a major factor. Asked if they’d support construction of an AI data centre in their neighbourhood, 76 per cent said no, and those people overwhelming voted for Democrats.
As one Republican strategist told Politico: “Data centers are the boogeyman du jour in this election cycle.”
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And that resistance helped make history...
Georgia Democrat Keisha Lance Bottoms campaigned for governor on a pledge to temporarily halt new projects so state officials can assess their overall impact on local communities, utilities and Georgians’ electric bills. (Atlanta is the U.S. city with the most data centres currently under construction.) Her victory made her the first Black woman governor in the United States and the first Democrat to lead Georgia in over 25 years.
In Texas – the state with America’s hottest data centre market – Democrat Gina Hinojosa pledged a moratorium on new projects and tied incumbent governor and Trump loyalist Greg Abbott to the “15 billionaire tech dudes who are amassing all our money, all our power and all our data and are about to blow up the world if we don’t come together fast to save ourselves.” Her win made her Texas’ first Latina governor, and the first Democrat to win the job in more than 30 years.
And in Ohio, newly elected Democrat Senator Sherrod Brown flipped Vice-President JD Vance’s former seat in part by battering incumbent Senator John Husted over the issue, calling him the “face of data centres” because he’d championed tax cuts for them.
So where is Canada in the data centre cycle?
Canada is nowhere near the U.S. when it comes to data centre construction: we’ve got 14 underway, and another 199 have been announced, according to York University research; the U.S. has 259 under construction and 697 planned, including the world’s biggest – Meta’s US$50-billion, 5 Gigawatt Hyperion project in Louisiana.
But the pace here is picking up, and the size of the so-called “hyperscalers” planned is growing. Bell Canada, for example, has announced a $50-billion, 1.2 gigawatt centre outside Regina, touted as the largest private-sector investment in Canada’s history, and renewable energy firm EverWind Fuels is working on a $10-billion, 420 megawatt facility on Cape Breton Island to be powered by wind and used primarily by Anthropic.
Alberta is planning the biggest building boom in the country, with four under construction and another 149 announced; and Meta broke ground this summer on a $13-billion, 1GW data centre in Sturgeon County. An energy executive told The Globe and Mail this week that the backlash in the U.S., where he said the build out has gone too fast, could actually spur development in Alberta.
Welcome to the feisty town hall meeting
Worry and distrust over data centres in Canada follows the same general trend line as in the U.S. In October, pollster Angus Reid reported that 64 per cent of Canadians want development limited, mainly over concerns about energy and water use, and worries that ratepayers will face higher energy bills.
Opponents have been getting organized to pressure municipal governments, whose zoning decisions determine whether a project can proceed. A website called Stop the Datacentre has become a kind of nationwide network of 46 local groups tracking municipal actions on the issue.
And opponents have been packing town hall meetings held by project proponents. An information session held on November 3 by EverWind in southern Cape Breton ran overtime as area residents peppered the company with questions. In Saint John, N.B., Beacon Data Centers is holding a town hall on November 5 as part of the provincial government’s environmental assessment process for its planned data centre. The city is facing a lawsuit from the activist group Save Lorneville over its rezoning of land to make way for the facility.
How can the biggest concerns be addressed?
Opponents contend data centres will strain provincial power grids and lead to higher electrical bills. Most of the big new proposals promise to “bring their own power” to avoid that – to build their own electrical generating stations, in other words – though they may need to connect to provincial grids in their initial stages. Even so, critics say, most of those generating stations will run on natural gas, and any new fossil fuel generation is a bad idea.
Bell Canada’s plans in Saskatchewan, for example, require an initial baseload of 300MW provided by the province’s electrical grid. Critics and proponents have argued over whether a plan by SaskPower to extend the life of coal-fired power plants is directly tied to the data centre – the utility says it isn’t – but the full data centre buildout will see Bell and its partners add another 900 MW of natural gas-fired power.
Natural gas is the preferred energy source because data centres, like most large industrial sites, require reliable and continuous power. To blunt the environmental impact, proponents are promising to install strict emissions controls.
Water is another major point of concern. Data centres have typically relied on large volumes of water to cool computer servers, and many communities worry that will mean water shortages and damage to local ecosystems. Proponents say their newest data centres use a closed-loop system that will need only initial access to municipal water systems and will then recycle water through the centres’ cooling systems.
The case for data centre corridors
For municipalities, the path of least resistance is often a moratorium, and municipal councils in Beaver Valley, B.C., Rocky View County, Alta., Cumberland County, N.S., and Mississauga, Oakville and Sault Ste. Marie, Ont., have all voted to pause development on data centres.
Anne Pasek, a Canada Research Chair at Trent University, worries that municipalities may not have the resources and expertise to properly assess projects but are “left holding the bag” because the zoning decisions come down to them. Other levels of government will feel the pressure too, of course, as the U.S. experience demonstrates. The provinces control environmental assessments – the Nova Scotia government has been criticized for deciding EverWind’s project doesn’t need one, for example – and the federal government sets emissions regulations. “I think all levels of government could help course correct, take a breath,” says Pasek, “and reflect what citizens are saying, not just what tech CEOs would like the future to be.”
Last year Pasek and 11 other researchers published a white paper, “Challenges and Opportunities for a Made-In-Canada Approach to Artificial Intelligence,” that recommends either the provincial or federal governments create “data-centre corridors” to guide development to areas that have existing grid capacity, preferably those that include a mix of renewable energy sources, or plans to add them.
“Right now, it’s a bit of a wild west situation,” she says.
Who’s living against the fence line?
As AI adoption accelerates and demand for computing power increases, Canadians and their governments will need to figure out where and how to integrate these major projects into communities.
In September the federal government released “Canada’s Responsible Data Centre Development Principles,” a framework that would see data centre proponents voluntarily commit to not shifting electricity costs to consumers, to minimizing water use and environmental impacts and to creating local benefits and strategic value for Canada. To date 45 companies, including Canadian builders such as Bell Canada, Telus, Cohere, EverWind Fuels and Beacon Data Centers, as well as American corporations Anthropic, Google, Meta, NVIDIA and OpenAI, have signed on.
Kelly Bronson, one of Pasek’s co-authors, who studies the social and environmental justice impacts of emerging technologies, says a voluntary pledge is fine, but what’s really needed is a legally binding benefit-sharing agreement, one that clearly defines the risks, benefits and strategic value to the community.
“The data centre conversation is really an extension of this age-old problem of governance around technology, development and extraction,” she says, “which is ‘How do we assess benefits and risks?’ People really want to know who’s going to benefit and who’s going to pay.”
She recommends regulators start by scoping out “who is going to be living against the fence line” and who is most vulnerable to its impacts, then use that to draft a clear legal agreement between the developer and local governments that accounts for community demands: “Communities aren’t necessarily saying no to these projects. They just want to see that this isn’t just industry profiteering but is about community benefits.”
