Summary

• The Alberta Utilities Commission has rejected a proposal for a massive rural data centre, citing missing information and a lack of public consultation
• The company behind the proposal, Synapse Data Centre, can reapply for approval once it has addressed the commission’s concerns
• One resident who opposed the proposal told The Narwhal she’s happy, but not letting her guard down

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A massive data centre proposed for the town of Olds, Alta., has been rejected by the provincial utilities regulator. 

Synapse Data Centre’s project would have been the largest of its kind in Canada, consuming as much power in a day as the entire city of Edmonton, fed by a 1.4 gigawatt natural gas power plant built to fuel the centre.  

The Alberta Utilities Commission, which regulates power plants in the province, denied the company’s application, citing missing information and a lack of public consultation. 

“The deficiencies include, but are not limited to, errors, insufficient or incomplete information and internal inconsistency among the application documents,” reads the decision, issued on March 6. “Collectively, the deficiencies create a significant lack of clarity as to whether application requirements have been met.”

Synapse Data Centre wants to build on this field, across the street from homes and an agricultural college. In rejecting the proposal, the regulator said the company failed to meaningfully engage with residents over concerns about noise, traffic, air pollution and more.

Residents of Olds expressed concern over the project, worried about a massive power plant and data centre located across the street from homes, as well as the agricultural college and its wetlands and fields. 

Those concerns were not sufficiently addressed, according to the commission. 

It notes the public consultation process started 14 days before the application was submitted for approval, and says information packages lacked details. The company’s application didn’t include key concerns raised by residents or identify how it attempted to mitigate them, for example. 

Environmental impact evaluations were also a concern for the regulator. 

“The environmental evaluation is a draft document with missing information, including incomplete citations, missing figures and document mark-ups including highlighted text,” according to the decision. 

It says environmental evaluations were based on “preliminary desktop data” and “conclusions relating to wildlife and wetlands are made from incomplete field studies conducted during the winter.”

The application further neglected to account for potential noise impacts on residents, including the use of backup diesel generators. 

Downtown Olds, Alta. The community of almost 10,000 people is hungry for new sources of revenue and has courted data centres. The impact of a $10 billion project raised both hopes and worries.

“Given the number and significance of deficiencies, the commission has concluded that it cannot process the application with the current information in the application, particularly because of the deficiencies in the participant involvement program requirements,” the regulator said.Synapse, however, can reapply for approval once it has addressed the commission’s concerns. 

The company did not immediately respond to an interview request, so it’s not known if this spells the end of the controversial project. Synapse previously said it wanted to start construction as early as this month. 

Janae Johnson is part of a group of residents who banded together to oppose the Synapse project and another data centre proposed for the town by Data District Inc. She told The Narwhal she’s happy about the decision, but she’s not letting her guard down. 

“We are still concerned about Data District Inc, and also know full well that Synapse can reapply once they fulfilled all recommendations from the [Alberta Utilities Commission],”  she said by email. “We are watching closely.” 

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Summary

• Synapse Data Centre Inc. has a $10-billion plan to build a sprawling data centre, along with a natural gas power plant to supply the electricity, in rural Alberta.
• Residents of Olds, Alta., have questions about air and water pollution — as well as the plan to use relatively new technology to keep the systems cool using less water. They first learned of the proposal in late January.
• Many of those questions remain unanswered, even as the company races towards its goal to get permits in place and begin construction in March.

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Just past the sign that welcomes drivers to Olds, Alta., sits a parcel of farmland. It’s on the edge of town, across the street from homes and tucked behind the old municipal building, which was sold to the local Co-op two years ago. 

It’s where a developer is proposing to build a $10-billion data centre, along with the second-largest power plant in Alberta, to satisfy the world’s seemingly voracious appetite for data. 

The natural gas facility, proposed by Synapse Data Centre Inc., will produce 1.4 gigawatts of energy each day, solely to power what could become the largest artificial intelligence (AI) data centre in the country. 

That’s equivalent to the daily demand for the entire city of Edmonton.

This parcel of farmland in Olds, Alta., was recently rezoned to allow for the proposed data centre. A natural gas plant is also planned for the site to power the data centre, which will use about as much electricity as the city of Edmonton.

For some, including a town council wrestling with debt and eager to find new income, it’s a boon. For others, including residents caught off guard by a fast-moving developer, it raises concerns over air and water pollution, noise and more.  

That sort of investment in a town of just under 10,000 is significant.

The developer approached the town last November, and went public near the end of January regarding its plans. Synapse has said it wants to start construction in March — something Mayor Dan Daley calls “pretty optimistic.”

The data centre, if built, would be the biggest project amidst a potential building boom in Alberta, pushed by a provincial data centre strategy launched in 2024 that seeks to attract $100 billion worth of investment to the province. 

It’s also a significant test of the government’s “bring your own energy” part of that strategy, which prioritizes data centre projects that include on-site power generation, separate from the provincial electricity grid.

The AI data centre boom is here. What will it mean for land, water and power in Canada?

But closer to home, the project has raised more immediate concerns for residents of Olds.

Janae Johnson, who lives near the proposed facility, worries about how close the data centre will be to homes, but also the wetlands and fields of Olds College, just across the street. She worries about air pollution, water, noise and a project that seems to be moving fast with little public information. 

“We’re talking about the biggest plant, that’s using new technology that hasn’t been proven, that is not typically located right in a residential area,” she says.

Janae Johnson lives near the proposed data centre. She’s concerned about potential air and noise pollution from the centre and its associated gas power plant.

Olds AI project announced in January — company wants to start construction in March

The Synapse data centre will actually be ten data centres and ten power plants, cobbled together on the same parcel of land on the edge of Olds, across from the agriculture and technology college. All together, the computer servers alone would eat up a gigawatt of electricity daily. 

The company says it will use a closed-loop water cooling system for both its data centre and the attached power plant, claiming it only needs to pull water to fill the systems once, a relatively new technology for data centres. The power will be produced by natural gas units tapping local reservoirs of gas.

AI data centres are the backbone of plans to dramatically ramp up artificial intelligence use in all aspects of life, from surfing the internet to use in hospitals, military applications and so much more. Data centres themselves are largely unassuming: inside are what look like rows of neatly arranged boxes — servers stacked on what look like bookshelves. 

Sandra Blyth, the economic development manager for the town’s investment agency, Invest Olds, says she signed a non-disclosure agreement with Synapse to protect some of the more detailed information, so she’s limited in what she can reveal about more technical aspects of the plan. 

She says the company approached the town in November and then moved quickly, with the project announced on Jan. 27. The land in question was rezoned to allow the project on Feb. 9 and the company says it wants to start construction in March.

Sandra Blyth is the economic development manager for Invest Olds. She says Synapse Data Centres Inc. first approached the town with its proposal in November 2025.

Synapse still has to go through the regulatory process with the Alberta Utilities Commission, the provincial regulator of the electricity grid, and Alberta Environment and Parks, making the March construction start date unlikely. 

“There’s a lot of regulation to get through, and so it’s hard to say, but that’s the target,” Blyth says about the construction timeline. “Targets are good.”

But the speed of that target has caused concern.

Residents concerned about emissions, water contamination and more

Johnson, who lives near the site, says there’s been a lack of clarity on the project and a lack of transparency from council, which doesn’t help convince her of the project’s benefits. She also learned about the development in late January, when three representatives from Synapse knocked on her door. 

“My biggest concern is going to be air pollution, noise pollution,” she says. “We have populations of deer and geese and loons and beavers. What is the impact of this going to be? That has not been addressed whatsoever.”

She’s not alone. Dozens of letters and comments sent to town council in February reveal extensive concern.

“Has there been any consideration of the amount of emissions that the gas-fired power plant will create?” one resident wrote to the town council. 

“How will wastewater be disposed of as it will likely be contaminated?” the same resident asked.

Community members attended an information session at the local community centre earlier this month to learn more about the proposed data centre.

Others wanted to see examples of existing closed-loop systems, remediation plans for the site, clarity on how air quality will be monitored and information on how contraventions would be enforced. 

Standing in the parking lot of the Co-op building, overlooking the site, Peter Grenier says he’s opposed to the project. He lives across the street from the proposed data centre.He thinks the project is too close to homes and is upset with what he sees as late consultation. 

Daley, the mayor of Olds, says he’s sympathetic to residents’ concerns, but there aren’t many answers he can provide. 

“A lot of their questions and concerns that they had directed towards council, we didn’t have answers on yet because these studies and assessments haven’t taken place yet,” he says.

Electricity use of proposed data centres in Alberta would be more than double the province’s average

Jason van Gaal, the president and CEO of Synapse, says the company has submitted applications to the utility regulator and the government, both of which are focused on the power generation aspect of the project. 

He says the company could, “in theory,” start construction on the data centre prior to receiving those approvals.

The natural gas power generation will produce greenhouse gas emissions as well as pollutants including nitrous oxides, something van Gaal says is a focus of provincial regulations.

“What the province wants to see is nitrous oxides below a certain threshold, and other things as well, but the reason they focus on nitrous oxide is because that is, typically, for natural gas plants, the hardest one to be compliant with.”

Van Gaal wasn’t able to provide figures on greenhouse gas emissions from the project. Natural gas produces methane, a potent greenhouse gas. He did say there could be carbon capture on the power plant in the future. 

The Synapse project isn’t the only project of its scale proposed for Alberta. The list of data centres that want to connect to the provincial grid include one project near Red Deer that would reach 1.8 gigawatts, another near Calgary requiring 1.4 gigawatts and several nearing the one-gigawatt mark. 

The province capped the total amount of power that could be drawn from the grid for all data centres at 1.2 gigawatts for the first round of applications. All of that power went to two projects, both near Edmonton, leaving 40 to wait in the queue or build their own power source.

In total, power demand for proposed data centres currently listed by the Alberta Electric System Operator sits at 21.2 gigawatts per day — more than double the average electricity use for the entire province. And that figure doesn’t yet include the Synapse project.

“Someone asked me at one of the meetings, are you okay living beside it? And I said, ‘Sure, no problem.’ The more I’ve gone down this, the less concerned I would be about it,” says van Gaal. “If the community wants me to live beside the natural gas plant myself, I don’t have a problem doing it.”

‘Feeling the pinch’: huge AI investment could help Olds’ finances

The prospect of a multibillion-dollar investment is particularly attractive, as Olds has struggled financially in recent years. Olds lost millions building a local fibre optic network that it recently sold to Telus at a loss, a large cannabis operation pulled up stakes in 2022 and provincial funding for municipalities has dried up. The town has eaten into reserves and cut services as it fights to balance the books.

The town of Olds, Alta., has struggled financially in recent years, and some municipal leaders are eyeing the proposed data centre as a way to boost property tax revenue. Mayor Dan Daley says the municipality is “feeling the pinch” of provincial funding cutbacks.

Mayor Daley says Synapse would be responsible for paying to bring utilities such as water and sewage to the area, a significant investment that could attract more businesses to that currently unserviced area of town. 

“The tax revenue that’s going to come off of that will definitely help,” he says. “As all other municipalities in Alberta, we’re feeling the pinch of the cutbacks to our funding from the provincial government.”

While that funding shrinks, the province is busy promoting data centres as an economic driver. There’s also more than $1 billion from the federal government as part of a data sovereignty strategy. 

That funding, and the enormous amounts of corporate money being dumped into the building boom, mean the dilemma of data centres is something more and more communities will face. 

Grenier, who worries about looking out over the data centre instead of the sunrises he has enjoyed for years, expresses a sort of fatalism about it, especially after Alberta Premier Danielle Smith weighed in with her support, saying on Facebook she’s “thrilled” to welcome the project.

“Once your premier has it on her Facebook page — she’s done, boys,” Grenier says.

Updated on Feb. 23, 2026, at 2:28 p.m. MT: This story has been updated to correct a typo. A previous version of this article stated Synapse Data Centre Inc. could become the largest artificial intelligence data centre in the county. It could be the largest in the country, not the county.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Manitoba Premier Wab Kinew has been dropping hints the province could soon look to position itself as a leader in what some commentators are calling the “fourth industrial revolution.”

Speaking on a politics and current events podcast in late October, Kinew hinted at three upcoming megaprojects that would help accelerate Manitoba’s transition to a “have province … not 40 years in the future, [but] within the next five or 10 years.”

One would be the much-hyped proposed upgrades to the Port of Churchill, which would transform Canada’s northernmost deepwater port into a vital trade hub and help strengthen the country’s hold on Arctic sovereignty. The other two projects mentioned on the Herle Burly podcast hosted by Canadian political strategist David Herle were more ambiguous, though Kinew hinted the province was looking to become a bigger player in the energy and tech sectors.

“Any tech play at a large scale is basically an energy play, and so we have a lot of low-carbon electricity in Manitoba and I think that’s going to be one of our competitive advantages,” Kinew said.

Manitoba Hydro has warned for years that electricity generating capacity is running scarce and new energy sources will be needed to maintain reliability while keeping pace with rapidly growing demand. Meanwhile, the province is championing energy-hungry AI data centres. Photo: Tim Smith / The Narwhal

Days later, the province announced it had received the first report from its newly minted innovation and productivity task force, which made recommendations to help Manitoba navigate the economic shift from “a system rooted in physical production of tangible goods, into a new economy in which wealth, power and security are rooted in the ownership of intangible assets like intellectual property, data and artificial intelligence.”

After releasing the report, Kinew was even more direct: “You’ll see servers and data centres in Manitoba in the future,” he told reporters.

Until recently, few people paid much attention to the machines behind the curtain — the physical infrastructure within which our pixelated world is intricately tied together. But the last few years have seen that infrastructure — namely data centres — take centre stage in the charge to spur economic development.

Anything that exists on the internet, or in the ever-nebulous “cloud,” is stored on a physical computer somewhere. Most likely that computer is inside a data centre — usually a warehouse-like building. Photo: Jenny Kane / Associated Press

Governments, including Canada’s, have invested hundreds of billions of dollars into new data centre construction; big tech companies like Meta, Amazon and Alphabet (Google) intend to spend upwards of $350 billion this year alone. Data centres have been announced, planned and built in cities across North America at an unrelenting pace. In the United States, economists estimate data centres and other information and technology infrastructure accounted for 92 per cent of the country’s gross domestic product growth in the first half of the year — driven by the explosion in artificial intelligence research and advancement — while the rest of the economy sat relatively stagnant.

But the sprawling data centres being built for artificial intelligence across the United States have come with their share of concerns. Some worry the ballooning investments could quickly spiral into an economic bubble; communities near a supersized data centre in Georgia have reported their taps running dry and drinking water turning to sludge; cities in artificial intelligence hubs like Virginia have seen their power bills skyrocket as data centres suck up huge portions of the electricity grid.

Against that backdrop and amid mounting concerns on how the energy sector and environment will be directly impacted, Kinew seems prepared to launch Manitoba into the tech-sector arms race. But is Manitoba ready to take its place in the AI revolution?

Table of Contents

• First things first: what’s a data centre?
• Does Manitoba have any data centres?
• How much power does a data centre use?
• Are these AI data centres bad for the environment?
• Can Manitoba’s grid handle data centres?
• Why is Wab Kinew talking about data centres?
• What are other provinces doing?
• What’s on the horizon for Manitoba?

First things first: what’s a data centre?

Anything that exists on the internet, or in the ever-nebulous “cloud,” is stored on a physical computer somewhere. Most likely that computer is inside a data centre.

“All the internet is, is someone else’s computer,” John Anderson, a computer science professor at the University of Manitoba who has spent his career researching artificial intelligence, said. “A data centre is a large collection of computers that is used usually for a particular purpose, but not necessarily for only one purpose, in an installation in one place.”

Those purposes can range from internet searches to email storage, video streaming, online banking, social media and, most recently, building and training artificial intelligence.

Currently, it’s estimated there are more than 11,000 data centres worldwide, with about 250 in Canada. As much as 40 per cent of data centre energy consumption goes toward powering intensive — and thirsty — water cooling systems. Photo: Mike Deal / Winnipeg Free Press

While data centres are a buzzword of late, they aren’t new technology. The concept has been around since the 1940s, though they were called mainframe computers at the time. As technology evolved, computers got smaller. But then the internet arrived on the scene and data centres became critical to powering the digital world’s unquenchable thirst for information.

Currently, it’s estimated there are more than 11,000 data centres worldwide, with about 250 in Canada.

For the most part, these data centres are nondescript buildings comprising rows of cabinets, called racks, with hundreds of computers stacked on top of another and often wired together. Those server racks need to be powered at all times, so data centres typically have both an on-site power distributor and a back-up generator. Finally — and critically — data centres are equipped with powerful cooling systems to keep the technology at optimal temperatures and humidity levels.

Data centres come in a few different flavours. Universities, governments and some businesses often have in-house centres — a climate-controlled office space that stores that institution’s servers, data and other IT equipment. Then there are larger retail data centres that lease server racks to customers at a price-per-kilowatt rate.

Universities, governments and some businesses often have in-house centres — a climate-controlled office space that stores that institution’s servers, data and other IT equipment, like this one in Manitoba. Photo: Winnipeg Free Press files

An example would be Amazon’s data centres, Anderson said.

“They’re used to run all of the traffic for their sales and logistics, they’re used to stream their TV programs and media,” he said.

“They’re also rented out as computer power for people to simply buy and use. I’ve had graduate students that have done all their AI research on Amazon’s machines to save me having to buy them and keep them upgraded in the lab.”

The larger, for-rent data centres have recently been eclipsed by the “hyper-scale” centre — megafacilities built by big-tech companies to handle their own immense data needs. In many cases, these centres are being used to train and power artificial intelligence, which requires exponentially more computing power than, say, sending an email to grandma.

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Does Manitoba have any data centres?

Yes. Statistics Canada currently lists eight data centres in Manitoba, not including sites at businesses or public institutions. Seven are in Winnipeg, one is in Winkler.

Most are on the smaller side. About half are owned by Les.net, a retailer with a handful of server rooms in the downtown Exchange District. Bell MTS, Canada’s largest telecom provider, built a 7.5-megawatt data centre in the city’s south end in 2015, which has since been acquired by Equinix.

There are no hyperscale-sized, AI-focused data centres in the province yet.

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How much power does a data centre use?

Data centres are ravenous for electricity.

That energy need is typically expressed in power capacity, which the University of Manitoba’s Anderson describes as the maximum amount of power needed to run the IT infrastructure and cooling equipment.

Traditional data centres built for the dot-com boom of the 2000s have a capacity of about five to 10 megawatts, equivalent to the power draw of about 8,000 homes.

But the complex computer chips used for artificial intelligence have prompted a dramatic spike in power demand, with a typical AI rack using at least 10 times as much power as an old-school web server.

Specialized computer chips for artificial intelligence are faster — and more power-hungry — than traditional computer chips. Photo: Seth Wenig / Associated Press

Hyper-scale centres have power capacities of at least 100 megawatts; the mega-facilities commissioned by tech giants like Amazon and Meta will require upwards of 1,000 megawatts to run.

According to the International Energy Agency, power demand for data centres has grown about 12 per cent each year since 2017, reaching 415 terawatt-hours — about 1.5 per cent of global energy consumption — in 2024. The agency predicts energy demand will more than double by 2030, consuming about 40 per cent more electricity than Canada currently generates in a year.

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Are these AI data centres bad for the environment?

As hyperscale centres continue to sprout across the globe, critics have raised concerns about their expanding environmental footprint.

“We know that data centres consume large amounts of energy and water, and we know that consumption is only going to grow, which will mean more greenhouse gas emissions and greater stress on water supplies,” Martin Krause, a director with the United Nations Environment Programme, said in a June release outlining new guidelines for data centre procurement.

According to the International Energy Agency, the electricity used to power centres generated 180 million tonnes of carbon dioxide equivalent emissions in 2024 — more than double the annual emissions from Canada’s oilsands. As data centres continue to get bigger and more power hungry, the energy agency projects emissions will reach between 300 and 500 million tonnes by 2035, making them some of the “fastest growing sources of emissions.”

The electricity consumption of AI data centres is project to grow. In Manitoba, that electricity mostly comes from hydro power at the moment, but new generation may rely on fossil fuels to meet rapidly rising demand. Photo: Tim Smith / The Narwhal

In Canada and the United States, most of the power comes from a mix of renewable sources, like hydroelectricity and natural gas (a smaller share comes from nuclear power and burning coal). Writing for the Canadian Climate Institute, researcher Kate Harland notes these massive data centre projects can incentivize provinces to expand their electricity grids with renewable resources, “enabling the bigger, cleaner, smarter electricity system necessary to decarbonize the Canadian economy.”

But, she adds, provincial electricity grids across the country are already reaching their limits, and the increased demand from data centres could exacerbate concerns of power shortages or rate hikes. If provinces turn to fossil fuel sources to meet that demand — like Manitoba’s planned investment in new gas-powered generators — it could undo efforts to decarbonize the grid.

As much as 40 per cent of data centre energy consumption goes toward powering intensive — and thirsty — water cooling systems.

“If you have a server room like you would have in the university’s computer services department, you would need to have specialized air conditioning in there to deal with all the heat the computers are throwing,” Anderson said.

“If you’re dealing with a really intense one … where the computers are very close together, you need to effectively pump cold water around them.”

The University of Manitoba’s supercomputer data centre, called Grex, recycles waste heat into nearby campus buildings. Photo: Supplied by the University of Manitoba

These larger centres use a maze of cold water-filled pipes nestled within the server racks to draw heat away from the computer equipment. In some cases, that water is then pumped into a cooling tower and evaporated, which requires a constant flow of up to 19,000 litres per minute. Other data centres use a closed-loop cooling system, which cycles the water back through a large refrigerator and uses significantly less water in the process.

While companies have been tight-lipped about the exact water use of their hyper-scale facilities, a study by the Lawrence Berkeley National Laboratory in California estimated American data centres consumed 64 billion litres for cooling alone in 2023, a little more than Winnipeg’s total billed water use for a year.

Many of these centres use freshwater for cooling, prompting concerns they could exacerbate drought conditions or strain limited drinking water availability in some regions.

Drought is a big problem in Canada — and it’s getting worse

In response, companies are looking for more efficient solutions. The University of Manitoba’s super computer data centre, for example, uses a water-cooling system that recycles the excess heat into nearby campus buildings. Other data centres are strategically built in cold climates, where free air-cooling systems can replace water cooling during the winter months.

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Can Manitoba’s grid handle data centres?

“Any large new load has the potential to impact our system, whether it be a data centre, foundry or manufacturing facility,” Manitoba Hydro media relations officer Peter Chura said in a written response to questions from the Free Press and The Narwhal.

Asked whether data centres, in particular, would strain the province’s grid, Chura said: “The best answer is ‘possibly.’ ”

The Crown utility has warned for years that generating capacity is running scarce and new energy sources will be needed by 2029 to maintain reliability while keeping pace with rapidly growing demand.

In 2023, an internal memo at the utility warned energy-intensive customers could quickly drain remaining capacity; the year prior, the province issued a moratorium on cryptocurrency data centres to save space in the grid.

The Manitoba Hydro Kettle Generating Station spans the Nelson River. Indigenous communities have long borne the frontline impacts of hydroelectricity development in Manitoba’s north. Photo: Tim Smith / The Narwhal

Even the province’s electric supply backstop, the Midcontinent Independent System Operator market, which regulates power sales between Manitoba and 15 American states, has struggled to meet rising demand. In its most recent rate application to the Public Utilities Board, Hydro noted it was impacted by “congestion” in the cross-border market during drought conditions in late 2023.

“A major factor contributing to the congestion … was the Atlas Power Data Center, a cryptocurrency mining operation,” Manitoba Hydro wrote in its filings.

Despite the capacity concerns, Manitoba Hydro isn’t factoring data centres, in particular, into its future resource plans. Nor is it suggesting that new infrastructure is entirely off the table.

“We factor in a wide variety of potential future growth scenarios into our load planning. This includes residential growth, growth from electrification, economic development objectives including data centres and projects already approved and in the pipeline,” Chura said.

A dizzying bird’s-eye view of Manitoba’s hydro-electricity dams

“We have fielded some requests from data centres, along with other commercial and industrial facilities that require larger amounts of power. Obviously, as this is commercially sensitive information, we cannot say more than that.”

Manitoba Hydro’s responses to questions from the public utilities board, however, show the province has received 13 data centre connection requests, currently under various stages of review. At least one has signed a service contract with the utility.

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Why is Wab Kinew talking about data centres?

In short: data is power in today’s economy, and building centres on home soil gives political leaders more control over how that information is managed.

Speaking to the Manitoba Chambers of Commerce after the release of the innovation task force report, Kinew stressed that home-grown data infrastructure is critical to keeping sensitive, personal data safe.

“How do we keep your privacy, so that our kids and grandkids will be able to develop as individuals and have that freedom to express themselves in a way that is truly free in the future of our society?” Kinew said. “Well, it probably means that we should stop sending all of our information south of the border.”

The AI data centre boom is here. What will it mean for land, water and power in Canada?

Privacy isn’t the only motivation. Kinew has characterized data centres, AI and other big-tech investments as economic drivers for the province. During construction, these facilities can create upwards of 1,000 jobs for electricians, engineers and technical specialists (though facilities typically employ far fewer people once complete and operational).

Anderson says investing in data centres and other AI technologies in Manitoba will generate more opportunities for students like his who are being “highly trained in doing future work.”

Canadian companies like Bell and Telus are keen to expand their data centre infrastructure and develop “sovereign AI” — that is, Canadian owned and operated platforms — with support from the federal government’s $2.4 billion AI Sovereign Compute Strategy.

“If we do not own and control the facilities, networks and compute capacity where this data resides, the benefits will flow outward. Data and compute sovereignty is therefore not a technical detail but a defining question for Canada’s future prosperity and Manitoba’s leadership within it,” the innovation task force report said.

Manitoba Premier Wab Kinew is adamant data centres will help transform Manitoba into a “have” province, rather than a “have-not” province. “You’ll see servers and data centres in Manitoba in the future,” he said recently. Photo: Ruth Bonneville / Winnipeg Free Press

Manitoba’s lobby records show Kinew met with lobbyists from Bell Canada in April and October to discuss “telecommunications, connectivity, investment and emerging technology including AI in Manitoba.” In May, Bell announced plans to build six AI data centres in British Columbia; in August the company announced it would partner with AI platform Buzz HPC to install NVIDIA computer chips — hardware used for artificial intelligence systems — in its Canadian data centres, starting with its five-megawatt facility in Manitoba.

This motivation is only bolstered by the idea that Manitoba is an ideal location for a data centre. In the late aughts, when the frenzy first swept the continent, the tech and telecom companies designing these facilities set their sights on Manitoba as a “new frontier” for these facilities, and the sentiment persists today.

Firstly, the province’s infamously long, cold winters allow tech companies to save money cooling server rooms. More importantly: Manitoba boasts some of the cheapest, low-emission hydroelectricity in the country, making the region attractive for power-hungry infrastructure developers. Finally, the innovation task force notes the Port of Churchill gives Manitoba a strategic advantage, connecting the province to global markets.

“If you’re using a lot of energy and it’s energy that is green-generated — or something close to it — then you can greater justify the use,” Anderson says. “That would be the advantage of doing this in Manitoba.”

The Manitoba Hydro Kettle Generating Station on the Nelson River just outside Gillam, Man. Manitoba has long relied largely on dams to generate electricity. The Manitoba premier says that fact — along with Manitoba’s cold winters — make it a prime location to build energy-hungry data centres that must be kept from over-heating. Photo: Tim Smith / The Narwhal

Kinew recognizes this advantage, and he’s aiming to leverage that into economic opportunities for the province.

“Power is the most important thing in the world right now. Everyone needs electricity. And Donald Trump gets a lot of his power, politically speaking, from the tech industry,” he told the Globe and Mail during an interview in late September.

“We’re all hungry to power AI data centres. And we have a choice to make about how we’re going to use that next 500 megawatts in our province. Do we continue to guarantee it for the U.S., or are we going to build up our own domestic economy, which may mean building more housing, more manufacturing, more mining projects? We’re saying we’re going to bet on Manitoba.”

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What are other provinces doing?

Several provinces have marketed themselves open for AI and data centre business — particularly those with hydroelectric resources.

British Columbia’s Crown utility offered an electricity rate discount for centres in 2022 and was fully subscribed within a year. Hydro Quebec began marketing itself to data centre developers in 2016 and landed investments from Amazon, Google, Microsoft and IBM.

Alberta has taken a different approach, relying on its natural gas resources, low tax rates and deregulated electricity grid to make the province the “most attractive place to build artificial intelligence data centres in North America.” As of June, Alberta’s Electric System Operator had received nearly 30 project applications with a combined demand of 16 gigawatts — nearly 10 times the electric load of the city of Edmonton.

As concern over electricity demand outpacing supply has grown, amplified by unpredictable weather conditions and droughts that make supply less certain for hydroelectric operators, those same jurisdictions are starting to restrict access to the grid.

Are data centres a threat to the Great Lakes?

In October, the B.C. government announced it would introduce legislation to limit the amount of power available to AI and data centre projects, while outright banning new cryptocurrency mines. Alberta has put a temporary cap on large-scale data centre connections while it sorts through the existing queue. Ontario and Quebec are limiting data centre connections to projects that bring local economic benefits, with the latter no longer chasing AI investments.

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What’s on the horizon for Manitoba?

In March, Manitoba introduced its own legislation to give government officials more power to decide which major projects can plug into the grid. Bill 28 will allow the province’s finance minister to tell Manitoba Hydro whether a development requesting a “large supply of power” should be prioritized, and require the utility to deny requests that are “not reasonably feasible.” It also gives the province power to define a “large supply of power.”

That means the future of Manitoba’s data centre and artificial intelligence landscape is largely in the hands of its politicians — and those politicians are signalling significant interest.

While Kinew won’t give away details about any planned data centre projects, he’s hinted more details could be made clear in the coming weeks.

Pressed for details of the upcoming megaprojects he mentioned to Herle in October, as well as his meetings with Bell lobbyists earlier that month, Kinew told CBC News to “check out the state of the province address this December.”

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Julia-Simone Rutgers is a reporter covering environmental issues in Manitoba. Her position is part of a partnership between The Narwhal and the Winnipeg Free Press.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Prime Minister Mark Carney’s first budget proposes cancelling or changing climate rules and initiatives, while cutting billions of dollars in planned environment spending and reorienting funds to “supercharge growth.” 

The government tabled its 2025 federal budget documents in Parliament on Nov. 4. In a speech, Finance Minister François-Philippe Champagne said the world is undergoing fundamental shifts that are upending the international order and hurting Canadian workers, and that “bold and swift action is needed.”  

That action includes weakening a key law that clamped down on industry greenwashing.

It also includes drawing down spending at two federal agencies involved in environmental oversight, and winding down two high-profile climate programs: the Canada Greener Homes Grant and the 2 Billion Trees program.

Premier Mark Carney promised action on climate change before he was elected, but the new federal budget suggests industrial initiatives are his government’s top priority. Photo: Kamara Morozuk / The Narwhal

The budget suggests Prime Minister Mark Carney’s government is likely to scrap a Trudeau-era plan to put a cap on emissions from the oil and gas sector, while investing in largely unproven technology that proposes to lower emissions from fossil fuel production.

“We will explore new markets and sell more of the best of what Canada has to offer. We will build here at home — stronger industries, nation-building infrastructures and millions of more homes for Canadians,” Champagne said.

“We will protect what matters most: our people, our communities and our sovereignty. And, we will empower Canadians by making life more affordable, creating new career opportunities and ensuring every generation can get ahead.” 

The federal budget is the government’s plan for spending and financial priorities. As a result, it’s considered a matter of confidence in Parliament, meaning failure to pass it would trigger an election. The Liberals have a minority and must get a few opposition members to vote with them or abstain from voting in order to pass the budget. The vote is expected to be held Nov. 17, after Parliament debates the budgetary motion this week and breaks next week for Remembrance Day.

Cuts to planned spending at Environment, Fisheries and Oceans and other departments

The government is proposing to cut a total of $1.3 billion in projected spending at Environment and Climate Change Canada over the next several years, in line with its push to meet savings targets and “streamline” programs. 

The spending cuts won’t be fully realized until after 2030. They are projected to occur in portions each fiscal year, with a final portion listed as “ongoing” with no end date. 

The budget indicated the cuts will be widespread, coming from eliminating activities and programs, as well as ditching some lease agreements and training contracts and combining or simplifying other activities like engaging with Indigenous communities.

Carney’s spending cuts also affect two key environmental agencies. The government said the Impact Assessment Agency of Canada, which ensures big projects are assessed for environmental and societal protections, was expected to lose $65.8 million in spending over several years. As the federal government pushes for increased development, particularly in natural resources, the agency functions as a checkpoint.

The Canada Water Agency, which coordinates with provinces, territories and Indigenous communities to protect fresh water, would lose $5 million in spending over several years.

‘Our water should never be that dirty’: the water crisis in First Nations is about staffing too

Meanwhile Natural Resources Canada, the department that oversees the fossil fuel sector, is also seeing proposed spending cuts of $2.6 billion past 2030.

That includes winding down programs like the Canada Greener Homes Grant, which provides loans for homeowners making energy efficiency upgrades, and ending the 2 Billion Trees program that supports tree-planting programs across the country but struggled to meet its own targets.

And Fisheries and Oceans Canada is expected to see spending cuts of $736.7 million over several years. The government said the department would “leverage artificial intelligence and other digital tools to modernize Canada’s fisheries management system.” 

It also said it would scale back some efforts and wind down activities that “have either achieved their objectives or for which alternative data sources exist.”

Government weakens anti-greenwashing law

The government said it would be rolling back some of the stronger measures Canada put into law last year to combat greenwashing — when companies make environmental claims without evidence.

The budget proposed removing two critical parts of Canada’s Competition Act that were added in 2024 to crack down on greenwashing, and would also take away a newly added power of third parties to bring greenwashing complaints to the Competition Tribunal directly.

The government said these rules had been “creating investment uncertainty” since they were introduced, and were “having the opposite of the desired effect.”

But Conor Curtis, head of communications at Sierra Club Canada, said weakening greenwashing rules is “more than just a problem for the climate, it is a problem for the security of our democracy.”“What we are seeing in the United States in terms of a breakdown of democratic processes, rights and freedoms, is in large part due to the spread of disinformation and specifically of climate denial,” Curtis said in a statement. 

“This climate denial and delayist messaging has often been purposefully spread by oil and gas corporations to undermine democratic processes.”

The Liberals’ new budget scraps some of the measures implemented in 2024 to combat corporate greenwashing — when companies make environmental claims without evidence. Critics fear ditching these regulations represents a threat to both climate and democracy. Photo: Isabella Falsetti / The Narwhal

For years, six large oilsands companies organized under the lobby group Pathways Alliance — Suncor, Cenovus, Imperial Oil, Canadian Natural Resources, ConocoPhillips Canada and MEG Energy — had told Canadians through advertising campaigns at the Super Bowl, on public transit and on social media that they were “making clear strides toward net zero” and that they intended to achieve “net-zero emissions from oilsands operations by 2050.” 

The claim was related to their proposal to build a large carbon capture and storage network in Alberta using technology that has not been tested at that scale. The Pathways Alliance set about trying to convince the government to help fund large portions of the project.

But its net-zero claim was the subject of a formal complaint in 2023 by Greenpeace Canada. The environmental group said the companies were misleading Canadians because they had no plans to phase out oil production — and only intended to tackle the carbon pollution generated during their operations, not from burning the fossil fuels they produce.

Canada’s anti-greenwashing rules were designed to scrutinize these kinds of sweeping environmental claims. They say any company’s claims about the environmental benefits of a “business or business activity” can be challenged if they aren’t backed up with evidence in line with an “internationally recognized methodology.” 

What do ‘clean’ and ‘green’ actually mean? Canadian watchdog receives complaints about environmental claims by Shell, RBC, Enbridge

When these rules were introduced, fossil fuel companies and lobby groups immediately complained, saying they were vague or overreaching. The oil company alliance, for example, scrubbed their websites and social media feeds of all claims it was trying to reach net-zero emissions. 

While the group said the move was “not related” to the truth of its claims, one of the lawmakers who helped get the rule into place told The Narwhal at the time it was “very telling” that the group had pulled information offline so soon after the rules came into effect. 

The alliance also told the Competition Bureau that the anti-greenwashing language created “significant legal uncertainty for businesses making virtually any type of communication that relates to the environment or climate change, regardless of the purpose of the communication and the intended audience.”

This fall, Carney announced that the Pathways Alliance proposal had the eye of the government and would be examined for potential referral to its Major Projects Office, which is supposed to help get projects built quicker. 

The budget also commits to extending a key tax break for carbon capture investments — and it makes clear that the government is relying on the unproven technology for major emissions reductions going forward.

Climate strategy meant to help protect competitiveness of oil and gas sector

In the budget, the government also laid out its anticipated Climate Competitiveness Strategy, which “aims to maximize carbon value for money.” 

The strategy is focused on Canada reducing its “carbon intensity,” the measure of how much carbon pollution goes into making a single unit of energy — for example, the amount of emissions generated per each barrel of oil. 

By lowering the carbon intensity, the budget noted, Canada can sell more of its oil, gas, steel and aluminum to jurisdictions that are looking for “low associated greenhouse gas emissions.” 

The federal government is focusing on reducing Canada’s carbon intensity — how much carbon goes into producing a single unit of energy — but this measure neglects the total emissions created by energy production, including by the fossil fuel industry. Photo: Amber Bracken / The Narwhal

“Lowering our emissions is critical to protecting the competitiveness of Canada’s oil and gas and steel sectors,” the budget stated. 

“Reducing emissions is not only essential for environmental reasons, but also a key factor in securing access to markets that prioritize sustainability.”

Carbon intensity is not, however, a measure of the total level of emissions from energy production. 

While Canada’s fossil fuel industry has lowered the emissions intensity for each barrel of oil it produces, the industry has also grown its oil production so its overall emissions have actually increased. 

The emissions that won’t be stopped by Canada’s carbon capture dreams

Canada likely won’t follow through with oil and gas emissions cap

The government said it would likely cancel plans to implement an emissions cap on the oil and gas sector in its climate strategy, which would align with an emphasis on capturing carbon to lower emissions.

The cap is supposed to be phased in starting in 2026. It’s meant to ensure oil and gas companies stick to their word that they can cut emissions, by ensuring the sector slashed carbon pollution 35 per cent by 2032, compared with 2019 levels.

It would be the first time Canada has imposed these kinds of mandatory, overall obligations on the industry, which is the country’s biggest carbon polluter.

Former prime minister Justin Trudeau’s government introduced a plan for an emissions cap on Canada’s oil and gas industry. Carney’s Liberals are prioritizing carbon capture and storage instead. Photo: Selena Phillips-Boyle / The Narwhal

As well, Canada, as the world’s fourth-largest oil producer and fifth-largest natural gas producer, would be the only large oil and gas producer in the world to have an emissions cap on its oil and gas industry.

After key industry players lobbied hard against the proposal, the Carney government has signalled it’s been lukewarm on the idea, which began under former prime minister Justin Trudeau. 

In the budget, the government said the emissions cap would have only “marginal value” in reducing emissions when its other programs — like implementing stronger regulations for methane, a significant greenhouse gas and the main component of natural gas — were kept in place.

The government said it was also supporting technologies like carbon capture and storage, which are supposed to draw down carbon emissions from the sector. It also noted that large industrial emitters are still subject to a carbon pricing system even though Carney cut the consumer carbon tax in the spring.

Canada will change the rules for industrial carbon pricing, electricity tax break and redirect clean fuel funding

The government said it would be changing the benchmark it uses to ensure the different provincial and territorial industrial carbon pricing systems meet minimum federal standards, but offered few details. 

It said it would set a new trajectory for the industrial carbon price “that targets net-zero by 2050.”

The government is planning to engage provincial and territorial governments “about improvements to the benchmark” and about pricing systems. 

The changes are coming after the federal government has been under pressure to explain what it would do if provincial carbon pricing systems don’t comply with federal rules.

Alberta announced it would freeze its industrial carbon price at $95 per tonne through 2026, which means it wouldn’t meet the federal benchmark as of next year, which will be $110 per tonne.

But Alberta Premier Danielle Smith recently said she was open to changing the province’s industrial carbon pricing program after meeting with Carney.

Clean energy is a focus of the new federal budget, with a tax credit proposed for provincial and territorial Crown corporations investing in clean power projects. Previous environmental conditions for the tax credit have been eliminated, however. Photo: Leah Hennel / The Narwhal

The budget also proposes to move ahead with a tax credit for provincial and territorial Crown corporations investing in “clean electricity,” but without some environmental and equity conditions Canada has previously imposed. 

In a budgetary update from December 2024, the government said that for the Crown corporations to access the tax credit, the governments responsible would have to commit, by the end of 2026, to publishing an “energy roadmap to achieve net-zero emissions by 2050.” 

They were also supposed to “pass on the benefits” of the tax credit to electricity ratepayers in their jurisdiction.

Removing the conditions will cut down on “administrative burden,” the government said in the budget.

Creating a Youth Climate Corps, critical minerals fund and other initiatives

The budget proposes providing $40 million over two years, starting in the fiscal year 2026–27, for a Youth Climate Corps.

The money would flow through Employment and Social Development Canada, and is meant to provide skills training for young Canadians so they can respond to “climate emergencies” and help with recovery and community resilience.

The government also proposed creating a $2-billion Critical Minerals Sovereign Fund at Natural Resources Canada which will make “strategic investments in critical minerals projects and companies.”

It said it was exploring the creation of a pilot project “to enable on-reserve construction companies to bid for infrastructure projects” and another pilot project to “monetize federal transfers to support financing for First Nations infrastructure on reserve.”

Part of the new budget proposes initiatives for First Nations construction companies to bid on infrastructure projects and for Indigenous participation in the government’s new fast-tracked projects. Photo: Taylor Roades / The Narwhal

The budget also proposes $2.3 billion over three years to renew the First Nations Water and Wastewater Enhanced Program, so about 800 active projects, including some related to ending boil-water advisories, are maintained. 

And it proposes funding for Indigenous participation in major projects. The Major Projects Office would receive $213.8 million over five years, some of which would support the Indigenous Advisory Council, which includes 11 representatives from First Nations, Inuit, Métis and Modern Treaty and self-governing communities.

Another $10.1 million over three years would go to Crown-Indigenous Relations and Northern Affairs Canada to continue leading the federal initiative that supports “meaningful participation of Indigenous rightsholders in consultation processes” while potential national-interest projects are reviewed.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

It was announced last December that a data centre more than 32 times the size of the current largest data centre in the world has its sights on a drought-stricken region in Alberta.  

Chief Sheldon Sunshine of Sturgeon Lake Cree Nation first heard about the $70-billion data centre campus proposed right next door in a press release. 

Sunshine was surprised, as his nation had not been consulted on the proposal. Looking back through his inbox, he found an overlooked email from just a few days prior to the announcement, bearing a subject line with the name “O’Leary.”

That email referred to Kevin O’Leary, also known as “Mr. Wonderful” of Shark Tank and Dragon’s Den fame. It was a message detailing O’Leary Venture’s plans for a data centre campus called Wonder Valley in the Greenview Industrial Gateway, an industrial development just over 500 kilometres from Edmonton, within Sturgeon Lake Cree Nation’s traditional territory and adjacent to their reserve.

Data centres are what make artificial intelligence (AI) dreams and nightmares come to life. Inside are tall rectangles twinkling with coloured lights — servers piled atop each other like bookshelves. These hardware blocks are the computational machines running complex equations required for AI. The harder they work, the hotter they get. Today, the most common way to cool these centres is by evaporative systems that usher hot air through wet pads, requiring significant water consumption as evaporated moisture is not recycled. Exactly how much water these centres need varies based on climate and size, but a 2021 report estimated a medium-sized data centre uses 1.13 million litres of water daily — roughly the amount used by 5,000 Canadians in that same day.

And O’Leary’s data centre proposal is far from middling. It seems that between filming a movie with Timothee Chalamet and flying south to Mar-A-Lago with Alberta Premier Danielle Smith to meet with U.S. President Donald Trump, O’Leary has also planned to build the world’s largest data centre. He’s doing it on drought-stricken Treaty 8 territory — and has yet to consult First Nations, according to Sunshine.

Claiming there had been zero notice or consultation from either the province or the municipality, Sturgeon Lake Cree Nation issued an open cease and desist letter to Smith this past January. 

Sturgeon Lake Cree Nation isn’t the only community surprised to find a data centre looming on the horizon. Across Canada, many data centres are proposed — and many, like Wonder Valley, are in regions afflicted by drought. As Canada embraces the data centre boom, many questions about the planning and impacts of these data centres linger — and answers are hard to come by.

Sturgeon Lake Cree Nation Chief Sheldon Sunshine says he found out about the Wonder Valley proposal for a data centre on his nation’s traditional territory through a press release. The nation has filed a cease and desist order over the lack of consultation. Illustration: Shawn Parkinson / The Narwhal

Drought and data centres are on a collision course

The Peace River is at the centre of the largest watershed in Alberta, stretching west into British Columbia. At the time of publishing, the Alberta side of the watershed is experiencing 12 water shortage advisories across various basins, while on the B.C. side the drought levels range from abnormally dry to moderately severe.

These are not new drought conditions, either. The Peace River watershed has experienced drought at varying levels since 2022. Within it, Greenview has faced drought since spring 2024. 

This last July, the municipality declared an agricultural disaster for their livestock industry citing “worsening drought conditions, persistent moisture shortages and significant grasshopper infestations.” 

“We urge all levels of government and the public to understand the gravity of the situation and to support the agricultural community through this difficult time,” Tyler Olsen, a reeve from the municipality of Greenview, said at the time. “Our producers are the backbone of not only our local economy, but also Alberta’s and Canada’s, and they need our full support now more than ever.” 

The Peace River watershed has experienced some degree of drought since 2022. Soon, the region may also be home to the world’s largest data centre, which will place additional demands on the water supply. Photo: Don Hoffmann / The Narwhal

Later, in the very same meeting where the agricultural disaster was declared, Coun. Dale Smith brought forth the motion to amend the sale to O’Leary Ventures to include an additional 1,926 acres of municipal land. 

O’Leary Ventures CEO Paul Palandjian has said Wonder Valley will need more than 8,000 acres of land.

Olsen told The Narwhal the sale has not gone through just yet, citing that deals of this size take time to complete. He said there’s no concern that a data centre of Wonder Valley’s size would worsen the state of the “two, three years ongoing” drought that caused the municipality to issue an agricultural emergency declaration. He believes the drought has more to do with a lack of rainfall. 

“It’s two completely different topics,” Olsen said. However, a data centre could massively increase the amount of water drawn from that limited supply. 

Drought is a big problem in Canada — and it’s getting worse

But it’s difficult to definitively say how much water a data centre of this magnitude would suck up for two reasons. 

One, because it’s never been done before — the world’s largest data centre is only roughly 245 acres — and two, AI is developing so fast that by the time you collect the information to contextualize the scale of water use, it will already be outdated, according to experts. 

Dr. Tushar Sharma is a computer science professor at Dalhousie University who’s been researching the feasibility of sustainable AI and software engineering. 

Sharma explains that eight months ago, ChatGPT was receiving around 10 million prompts per day worldwide. Recently, the amount of prompts per day hasn’t just doubled, tripled or even sextupled. Not even close. 

It has multiplied by 250 to 2.5 billion prompts. 

“This is crazy,” Sharma said. 

And that was two months ago. 

As data centres proliferate, impacts are hard to estimate

Calculations of how much water a ChatGPT prompt uses also vary by the size and complexity of the prompt. The greater and more complex the question is, the server running the model must run greater and more complex calculations to determine its answer. 

Like anyone who’s ever owned an old laptop knows, the more you ask it to do, the hotter it gets. Sharma explains that when a server heats up, the data centre housing it must cool it down to keep it functioning — water is the cheapest way to do so. 

Drought is a persistent issue in many parts of Canada, including regions of B.C. and Alberta where data centres may soon take root. A mid-sized data centre can consume 1.13 million litres of water daily. Photo: Louis Bockner / The Narwhal

South of the border, the Meta Newton data centre in Georgia (now renamed to Stanton Springs) that soaked up all the water in the area — leaving nothing but orange sludge to run from nearby Newton County residents’ taps — was only around 57 acres.

If Wonder Valley is completed, it will be more than 140 times the size of the Newton data centre. 

However, the effects of data centre resource drainage are not restricted to nearby faucets; their presence can be felt much farther away, in the wallets of everyday folks. 

A parched place: the Alberta drought crisis is bigger than one summer

Earlier this year, the New York Times reported that the increased pressure on energy grids from data centres is causing whatever hydro is left to increase in price. Due to this manufactured scarcity, electricity bills for U.S. residents are expected to rise by an average of eight per cent.

AI regulation is not a popular term in government either. 

Evan Solomon originated the role of AI and digital innovation minister last May under Prime Minister Mark Carney. 

In his first speech as the new minister, Solomon said the federal government would not “over-index” on AI regulation and would instead be setting its sights on data protection. 

Solomon likened AI innovation to a “bucking bronco” that he doesn’t intend to throw a saddle on with regulation, but rather ensure that it “doesn’t kick people in the face” by misusing their data or breaching their privacy. 

The federal branch is not the only level of government excited by the new market. 

Alberta Technology and Innovation Minister Nate Glubish voiced the province’s intent to become an international leader in data centre infrastructure, eyeing more than 19 gigawatts worth of proposals this past summer. These centres, Glubish said, could make use of stranded oil and gas assets within the province.

Federal and provincial politicians have expressed enthusiasm about the employment opportunities provided by data centres, though such centres will require minimal staffing once they are operational. Illustration: Shawn Parkinson / The Narwhal

Governments are enthusiastic about data centres, but their long-term costs and benefits are still uncertain

Politicians like Glubish and Ontario Energy Minister Stephen Lecce often say that data centres are job creators. University of Waterloo computer science professor Martin Karsten isn’t convinced. 

Karsten says it does not take very many technicians to ensure a data centre is running smoothly. If anything, the construction of the data centre will be a larger job creator than a fully operational data centre, which largely relies on automation. 

A Meta report on the Stanton Springs data centre underscores this reality. The report notes that just over 200 jobs will be “supported once [construction is] completed,” whilst also boasting that 1,300 skilled trade workers will be working on the construction of the facility. 

If data centres aren’t huge long-term job creators, are they beneficial for generating tax income? 

Ian Mondrow, a partner at law firm Gowling WLG specializing in energy regulation and policy, doesn’t think this is the answer either. 

Doug Ford’s government in Ontario is currently trying to pass Bill 40, the Protect Ontario by Securing Affordable Energy for Generations Act, which includes amendments to the Electricity Act that would give the province the power to be picky about which data centres they allow to connect to the power grid. The bill currently states that only projects that cultivate “economic growth” will be allowed access in an effort to keep energy affordable. However, the bill also introduces new provincial power to subsidize the cost of connecting data centres to the power grids.

Mondrow explained that these subsidies could be funded from electricity ratepayers — anyone with a power bill — or through taxes. 

Whether Ontarians could see an increase in their hydro bills or their taxes is largely up to a formula to be calculated by the Ontario Energy Board. 

The Ontario Energy Board declined to comment for this story.

Many data centres in Canada are owned by American companies or store American data, which affects who can access data stored on Canadian soil. Illustration: Shawn Parkinson / The Narwhal

Mondrow thinks that other than a fear of missing out on the latest tech boom, the likeliest reason why data centres are pulling focus is because of greater importance being placed on data sovereignty, especially given the current global trade climate.

Data centres are not just the synthetic synapses of AI: they can also be cloud storage facilities. 

If the location of the data centre is different from where the data was created, this is called data residency. The physical location of the data centre determines what laws and regulations the data is subjected to, but so does ownership and operations. This can be problematic because it can leave Canadian data vulnerable to being accessed by foreign governments who invest in Canadian data centres. 

A new analysis by the Investigative Journalism Foundation found that 84 of Canada’s 283 total data centres are owned by American companies. Under U.S. laws, American companies can be compelled to hand over data stored in Canada. 

What we do know is that despite the murky benefits of data centres, they are surely on their way, and not just Kevin O’Leary’s.

Bell Canada has plans to build six new AI data centres in British Columbia in the next couple years. 

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

We got rain — so our drought concerns are over, right?

It’s something we hear from readers, family and friends all the time. It’s a fair question. Drought warnings are becoming more common across Canada, and when we get a wet day, week or even month, we may think — or hope — that it’s solved the drought issue. But drought can be a compounding problem, even after the cool relief of rain.

It’s an issue affecting forests, grasslands and coasts. According to the Canadian drought monitor, 71 per cent of the country was in drought as of July 31 and most of Canada had below-average precipitation in July. The government of British Columbia reported snowpack in May was 71 per cent of normal, but by June, that plummeted to 13 per cent of normal, with some areas at zero per cent of normal.

While some areas of Canada have received more rain than normal lately, others are receiving starkly less — like southwestern Saskatchewan, which received less than 25 per cent of typical rainfall in June. Several areas in the province have declared agricultural states of emergency.

Water scarcity is already an increasing risk, and even more pressures are growing. Donald Trump has called Canada a “very large faucet” that could be used to mitigate water shortages in the United States. And companies like Bell Canada are looking to open artificial intelligence (AI) data centres, which guzzle an incredible amount of drinking water, sometimes millions of litres in a single day for large centres.

Many Canadians may be surprised to hear they have no enshrined right to clean water. Residents of Glade, a small B.C. community, mounted a legal challenge against private logging near their water supply, and in 2019 a B.C. Supreme Court judge concluded they did not have any inherent right to this natural resource.

“Do you have a right to clean water?” Justice Mark McEwan said in court. “I’d suggest you don’t. There just is nowhere in the law where you can look and say, ‘There it is — there’s my right, I have a right to clean water.’ ” Canada recognized the UN declaration on the human right to safe drinking water and basic sanitation in 2012, but that is not a legally binding protection.

According to the Canadian Drought Monitor, over half of the country is in drought. Map: Agriculture and Agri-Food Canada

Many interests want to pull from Canada’s water — while drought already has caused major ecosystem and economic losses.

Crop insurance payouts in Canada ballooned in the past few years, ranging from $3.5 billion to $4.9 billion between 2021 and 2024. For the decade before that, between 2010 to 2020, payouts ranged from $77 million to $1.7 billion. Farmers in the Atlantic provinces have said this year’s drought is the worst in recent memory, decimating both their crops and their livelihoods. 

Drought can also interfere with hydroelectricity generation, making electricity more expensive — B.C. and Manitoba had to import power in 2024 due to low reservoir levels.

By June, B.C. snowpack had plummeted to 87 per cent below normal. Illustration: Steph Kwetásel’wet Wood / The Narwhal

Drought isn’t only lack of rain — it’s about water in soil and waterways, and impacts of industrial activity

Drought can’t only be understood in terms of lack of rain — it’s how water is functioning in the whole system, Younes Alila, professor in the University of British Columbia’s department of forest resources management, previously told The Narwhal. In a recent short documentary, Trouble in the Headwaters, he explains how logging has contributed to increased risk of flood and drought by removing tree cover that keeps the ground moist and cool, moderating the speed of melting snow.

“When the snowmelt’s slower, it has a chance to infiltrate into the soil, recharging the groundwater,” he explains in the film.

Without trees, water can rush down slopes, causing flooding and landslides, he says. “This is why we are going to be living under a heightened risk of flooding and droughts for decades to come — because by nature, the recovery is very slow.”

Trouble in the Headwaters: the hidden impacts of clear-cut logging in B.C.

Many wetlands that retain water and mitigate floods have also been cleared for human development. That means soil is more likely to dry out, so it also doesn’t absorb water as well.

Hotter weather exacerbates drought risk by causing more erratic precipitation and earlier, faster snowmelts than normal — and the sudden flows can all wash away over the dry soil rather than getting soaked in.

It’s similar to pouring water on a dried-out potted plant; the parched soil doesn’t absorb the water, and it runs out the bottom of the pot instead.

Snowmelt is integral to spreading water through the landscape. When it melts faster, it has less chance to absorb deeply into the soil. Photo: Louis Bockner / The Narwhal

Hotter weather is causing drought nationwide, posing health risks to humans and lethal risk to animals

As the climate changes, bringing higher temperatures and drier conditions, drought conditions spread and worsen. The impacts are widespread, even if they’re felt at different times to different degrees. 

It may be tempting to not worry about lower levels of drought, but the effects can still branch outwards. B.C. classifies drought severity by levels 0 through 5, going from normal to severe and rare. In the B.C. Interior, much of the area is at Level 2 drought, midway through the scale. But some rivers are low and warm enough already to risk aquatic life like salmon, which rely on cool temperatures.

This is Neekas, Heiltsuk Territory. All of these salmon went into the creek, the creek dried up b/c of no rain so far this fall, and just died, and this is just one reach! Global warming is killing everything. This is such a sad scene. Video credit, Sarah Mund pic.twitter.com/vYhEKwD5mN

— William Housty (@WilliamHousty) October 4, 2022

When plants dry out in drought, it can mean less shade and shelter for animals like ground-nesting birds, as well as less productive growth of nuts and berries for deer and bears, or less lichen for caribou. That can force animals to move in search of food and water, sometimes to urban areas. 

Two bears walk along a river in Moose Factory, Ont. Animals also rely on healthy water systems that support their food and shelter. Photo: Carrie Davis / The Narwhal

Drought comes with human health risks, too. According to the Canadian Climate Institute, drought can degrade water quality and promote algal blooms — which are increasingly common in Ontario’s Great Lakes — and waterborne diseases. Meanwhile, dusty conditions can worsen respiratory problems.

On the left, Nathan Wilson, a doctoral candidate with Lakehead University’s environmental and biotechnology program, collects samples of a suspected blue-green algae bloom in Hazelwood Lake, outside Thunder Bay, Ont., where warmer water is allowing the growth of blooms. Photos: Chris McEvoy / The Narwhal

Explosion of AI data centres will mean more industrial water use — including in the Great Lakes and drought-stricken B.C.

The push to build data centres across the world will put significant pressure on water supply — a Bloomberg investigation found that two-thirds of AI data centres globally are built or planned in places with high water stress. Much of that stress is due to other industries: AI currently uses much less water than, say, mining, but the race by Alberta and other provinces to attract new centres means the water they use is increasingly significant. 

In B.C., Bell plans to build six AI data centres, while Telus plans to launch an AI “factory” in Kamloops, touting the project as something that can bolster Canada’s sovereignty in the face of U.S. tariffs and threats of annexation. Bell’s first data centre is also planned for Kamloops, and the next in Merritt, both in B.C.’s dry Interior.

Merritt is in the Nicola watershed, which is in Level 3 drought. The nearby Coldwater River is having such low flows it is not meeting the needs of salmon, a 2025 study from the Raincoast Conservation Society and Scw’exmx Tribal Council found.

“The Nicola watershed is one of B.C.’s most vulnerable regions to the effects of climate change, particularly as it relates to drought,” Raincoast said in a release.

In 2023, dozens of homes in the Squilax community east of Kamloops, B.C. were burned to the ground by the Bush Creek Wildfire. Bell Canada plans to build its first data centre in Kamloops. Photo: Jesse Winter / The Narwhal

Meanwhile, in Ontario’s Great Lakes region — which provides water to 70 per cent of the province’s 14 million people — there are at least 108 data centres in the Greater Toronto Area alone.

Data centres use cold water to cool their computers — and they use immense amounts. One study projected global AI demand will withdraw between 4.2 and 6.6 billion cubic meters of water in 2027. That’s more than Canada’s entire manufacturing industry used in 2021. And demand is only growing.

Are data centres a threat to the Great Lakes?

In Newtown Country, Ga., where tech giant Meta built a data centre, the cost of water has soared, with rates set to increase 33 per cent over the next two years, and the county is on track to be in a water deficit by 2030, the New York Times reported. Meta makes up about 10 per cent of the county’s total water use every day.

In Spain’s Aragon region (home to about 1.3 million people and a bit bigger than Vancouver Island), Amazon’s new data centres are predicted to double the entire region’s current electricity use, and the company is asking to increase its water consumption by 48 per cent. 

The Greater Toronto Area has the highest concentration of data centres, with more than 100 along the shores of Lake Ontario. Photo: Christopher Katsarov Luna / The Narwhal

AI has the ability to increase our efficiency and better monitor our use of natural resources — but its water consumption is on track to outweigh its environmental contributions, three professors from the University of Amsterdam recently argued in The Conversation.

These centres are draining groundwater while “the minimum needs of the world’s poorest to access water and sanitation services have not been met,” they argued, adding that Google’s data centres used over 21 billion litres of drinkable water in 2022, up 20 per cent from 2021. Each year, the computing power used for AI increases.

“We believe there is sufficient evidence for concern that the rapid uptake of AI risks exacerbating the water crises. … As yet, there are no systematic studies on the AI industry and its water consumption,” they concluded.

Unlike the European Union, Canada doesn’t have water use disclosure rules for data centres — in part because water is managed provincially, not federally. 

While some areas may be experiencing more rain, other areas are experiencing record dry months. A warmer climate means more erratic precipitation, with intense highs and lows. Map: Shawn Parkinson / The Narwhal

Communities, experts are already calling for industries to pay more for water

The B.C. non-profit organization Watershed Watch reported this summer that industrial water users in the province pay a maximum of $2.25 per million litres, a rate that hasn’t increased in a decade. In Ontario, the rate is just $3.71 for the first million litres, with commercial water bottlers paying an additional $500 per million litres. 

But industries use billions of litres of water — mining company Rio Tinto used 72.5 billion litres of water in Quebec in 2022 alone. According to the Montreal Gazette, businesses used 800 billion litres of water in the province in 2021 and paid just $3 million, a number the provincial government cited when it increased commercial water rates 900 per cent last year.

Vast quantities of water are used in mining, oil and gas extraction and other industries. Here, a tailings pond flows with wastewater at an open-pit mine operated by Suncor in northern Alberta. Photo: Amber Bracken / The Narwhal

Watershed Watch suggests raising industrial water rates and using that revenue to support watershed security. It suggests that revenue could also go to developing regional watershed boards made up of “First Nations, governments, farmers, non-profits and other stakeholders to manage water locally.” 

The non-profit says B.C. sounds “like a broken record” telling residents to “take shorter showers and water their lawn less,” and that while these steps are important, it’s an “unserious solution to a very serious problem.”

“We’re not asking for a radical solution, just a responsible one. The status quo is failing our salmon, our watersheds and everyone who calls B.C. home.”

Prairie droughts add to wildfire and drinking water issues for Indigenous communities

First Nations disproportionately lack access to clean drinking water, and drought exacerbates the issue. Some First Nations have been left waiting years to get access to clean water. Tallcree First Nation in northern Alberta relies on spring runoff to pull water from a nearby creek, and it told the CBC it’s concerned when flows are low, it won’t be able to pull anything.

In 2015, former prime minister Justin Trudeau promised to end long-term boil water advisories in First Nations by 2021. As of July 11, 38 advisories remain in place. But the feds specifically define “long-term” as a single advisory lasting more than one year — so communities that experience many “temporary” boil water advisories for weeks or months at a time are not included. The federal government also does not track advisories in B.C. First Nations. 

‘You want my consent? You improve my people’s health,’ First Nations chief near oilsands tells Carney

First Nations access to clean water is a painfully long-standing issue, which has been condemned by multiple United Nations representatives over the years — and yet, some Canadian politicians are still opposing a First Nations clean water bill.

Meanwhile, drought conditions can also exacerbate wildfires, which have hit the Prairies hard this year. Almost 69,000 square kilometres in Canada have burned — making this Canada’s second-worst wildfire season on record so far. More than half of all areas burned in 2025 are in Saskatchewan and Manitoba.

If that surface area was instead one of the Great Lakes, it would be the second biggest one behind Lake Superior and ahead of Lake Huron. If it was an island, it would be twice as big as Vancouver Island.

Above, fires broke out in Manitoba in May. Manitoba’s northern communities are most impacted by wildfires and Indigenous communities are disproportionately affected. Photo: Supplied by the Government of Manitoba

Manitoba had a dry spring followed by an unusual spring heatwave, contributing to the devastating fires that caused thousands to be evacuated.

Again, Indigenous people are being disproportionately affected by evacuations.

“This will be the largest evacuation Manitoba will have seen in most people’s living memory,” Manitoba Premier Wab Kinew said in May. 

Government and industry have the tools to combat persistent drought

Last year, when Alberta was dealing with low water supply, Tricia Stadnyk, a professor of engineering and geography at the University of Calgary who studies hydrology, told The Narwhal Canada as a whole has ignored what’s coming.

“Oh, it’s Canada, we have so much water we don’t know what to do with it, we’re never going to have drought that’s so severe people have to move or can’t survive or we can’t grow crops,” she says, summarizing the common belief that massive, widespread water shortages can’t happen here. 

“It’s just unthinkable for Canadians to think about drought at that scale, but the reality is this is the future of the Canadian Prairies.”

“Unless properly managed, even Canada’s water supplies will eventually run out,” Stadnyk wrote in The Conversation earlier this year.

Prairie provinces are supposed to share water. What happens during a drought?

She calls for more data collection so we can forecast water flows better, and for improved cooperation across municipalities, provinces, Indigenous governments and the feds, along with the United States at transboundary areas. She says the current system has “fragmented oversight” and “privileged licences” for industrial users that shows “little care” for watershed health. She advocates for improved water efficiency by industrial users, along with people curbing their individual use.

“It’s time to challenge our wasteful ways and accept that even in Canada, water must be managed effectively,” she says. 

“The choices we make today will impact our children and their children and will literally mean the difference between them thriving or surviving as a society.”

A diary of drought

B.C. has been dealing with persistent drought since 2022. In April 2024, the province recorded the lowest snowpack since 1970. After a dry, hot summer, much of B.C. remained in drought even through the winter into 2025.

Going through the province’s 2025 drought updates reads as a diary of land struggling to grasp onto water:

• May 15: Significant 30-day precipitation deficits… rapid decline in streamflows… lowest on record streamflow for Kiskatinaw River in the northeast.
• May 22: [Snowmelt] is still tracking earlier than normal.
• June 5: Long-term drought risk persists in the northeast and southeast… Lake storage in the South Peace has not recovered from last summer.
• June 19: Recent rainfall has improved drought conditions in the northeast… but streamflow response was muted in some areas due to long-term dryness. … Chemainus River (Vancouver Island) approaching record low flows.
• July 3: Flows in the Similkameen are at a record low…
• July 10: Declining flows and rising stream temperatures continue to pose a risk to aquatic ecosystems in tributaries across the Okanagan and Vancouver Island.
• July 29: Despite near-normal rainfall in some areas providing short-term drought relief, long-term drought effects persist… reports of fish stranding on Vancouver Island.
• August 5: Flows in the Coquihalla River are at a record low for this time of year.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

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This story is part of a Great Lakes News Collaborative series called Cash Flows: Industry, Ecology and the Future of the Great Lakes Blue Economy. The series examines the wealth derived from the waters of the Great Lakes and the ways in which that economy is threatened. This story was originally published by Great Lakes Now

Benton Harbor on Lake Michigan’s southeast coast is known to visitors for its vacation feel and beautiful beaches.

But it’s also one of the poorest cities in Michigan. In recent years, the area has struggled to find the funds to invest in critical infrastructure, most noticeably for its water supply which until recently had tested for dangerously high levels of lead.

So while facing a US$2.5-million annual deficit in operating its water provider system, the city has turned to deep-pocketed multinationals to help bring about change.

Last year, reports emerged that an unnamed company was seeking to build a US$3-billion data centre on 280 acres of land east of the city.

Not everyone backs the move.

The Greater Toronto Area has the highest concentration of data centres, with more than 100 along the shores of Lake Ontario. Photo: Christopher Katsarov Luna / The Narwhal

“I don’t want this. I don’t think it would be to our advantage right now,” said Reverend Edward Pinkney of the Benton Harbor Community Water Council, who lives about a kilometre and a half from the proposed location.

“There are environmental and security and management issues. Wasted energy, pollution and the noise. Think about the traffic. There are so many things we are concerned about.”

With artificial intelligence and the demand for cloud computing set to grow in the years and decades ahead, technology companies are increasingly eyeing up the Great Lakes region’s comparatively cooler climate and ample water resources. This is because a data centre is filled with computers, and the more information those computers process, the more they generate heat. If that heat is not dissipated, it would lead to system failure. Water can act as a coolant by circulating through the system, and cooler climates help to reduce the energy burden to maintain these sensitive systems. 

The Great Lakes: ground zero for data centre growth

It’s an issue set to affect residents across all Great Lakes states and provinces at a time when federal protections for Great Lakes water are being slashed.

At the time of reporting, of the U.S.’s estimated 3,680 data centres, 847, or nearly one in four, are located in Great Lakes states, according to a count by Data Center Map. In Cleveland, there already are more than 20 data centres within 24 kilometres of Lake Erie, with many more set to come online around the region. 

Data Center Map counts 264 centres in Canada, however, that number is disputed by other sources saying it’s much closer to 340. The Greater Toronto Area along the shores of Lake Ontario is home to 108 data centeres, according to Datacenters.com.

At the time of reporting, Data Centers Map has 9698 data centres listed from 164 countries around the world. Map: Data Center Map

In April 2024, Amazon announced plans to develop around US$11 billion worth of data centre facilities about 32 kilometres from Lake Michigan in New Carlisle, IN. While Google and Meta have announced plans to spend US$2 billion and US$800 million respectively on their own data centre operations in other parts of Indiana.

Similar scenarios are playing out in Great Lakes communities in Illinois, Michigan and beyond.

In Mount Pleasant, WI, Microsoft is building data centers on three separate sites close to the shores of Lake Michigan.

Across the globe, Microsoft’s 300 data centres consume more than 125 million litres of water per facility each year. That’s the equivalent of 15,000 Olympic size swimming pools filled with water at each data centre. While Microsoft’s 2024 Environmental Sustainability Report references goals around construction waste and air filtration at its data centres, there is no reference to efforts to conserve the use of water.

“Most of our data centre facilities in Mount Pleasant will not require ongoing access to large quantities of water. This is because the facilities have been designed with a closed-loop cooling system that employs a combination of chillers and recycled water,” a Microsoft spokesperson told Great Lakes Now.

Data Centers Map has been tracking data centres offering co-location, cloud services and select crypto miners and hyperscale operators (like Amazon and Microsoft), since 2007. They don’t cover government or enterprise data centres. Map: Data Center Map

Water that is used in the closed-loop system — the Microsoft spokesperson couldn’t say how much that would be, though similarly sized systems typically use tens of thousands of gallons — will be drawn from the municipal water system.

Once the system and pipes are filled, the water will remain in the closed-loop system to be reused for cooling.

“The remaining portion of the data centre campus will use outside air and occasionally some water to support cooling when it is very hot,” the spokesperson added.

But climate change is set to further raise temperatures here in the Great Lakes region, as it is around the globe. According to AccuWeather, Mount Pleasant saw 25 days with temperatures of 29 C or higher last year (in nearby Milwaukee there were 15 days and seven days in 1980 and 1981), a trend that’s set to continue in the years ahead.

The relationship between water and tech

With the artificial intelligence needs only set to grow, there’s no getting away from the need for data centres. Every ChatGPT request for a dinner recipe or machine-generated image adds to that demand.

Some experts are suggesting data centres’ workload be timed to coincide with the coolest hours of the day. Closed-loop cooling systems such as those proposed for Microsoft’s Mount Pleasant facilities are another way that water could be used more sustainably.

But others reject the notion that just because there’s no smoke billowing from a data centre that it’s good for the natural environment.

“There may be a tendency to think of data centres as a somewhat cleaner industry than, for example, a large factory,” said Helena Volzer, senior source water policy manager at the Alliance for the Great Lakes, a nonprofit.

“But that’s not quite the case because the water being used will be warmed and also potentially contain contaminants.”

Water from the Great Lakes, like Ontario, seen here at the mouth of the Humber River, is pumped into data centres for cooling. Photo: Christopher Katsarov Luna / The Narwhal

Home to Aurora, one of the fastest supercomputers in the world that weighs in at 545 metric tons, the Argonne National Labs, a joint effort involving the U.S. Department of Energy and several private entities located southwest of Chicago, uses water from the Illinois and Chicago canals for its closed-loop cooling system, as well as Lake Michigan water for “domestic and laboratory purposes.”

The website of the Argonne National Labs stated in October 2022 that “Because Aurora is a liquid-cooled system, Argonne had to upgrade its cooling capacity to pump 44,000 gallons (166,000 litres) of water through a complex loop of pipes that connects to cooling towers, chillers, heat exchangers, a filtration system and other components.”

But a media representative couldn’t say whether the 166,000-litre figure — the equivalent of around 4.5 semi-trailers filled to the top — has increased or decreased in recent years, or whether that is sourced from the Illinois or Michigan canals, Lake Michigan or from somewhere else.

Volzer said there is cause for concern regarding the amount of water that data centres are using (or will use going forward), largely because we don’t know how much that is. 

“Considering that lack of knowledge, alongside existing water use, demands from other water intensive industries (such as semiconductor chip manufacturing, quantum computing, critical minerals mining and agriculture) climate change, and potential population growth driven by the economic development data centres are touted to generate, there is cause for concern that water resources, especially groundwater, could experience strain,” she said. 

In 2024, the Joyce Foundation examined groundwater governance in the U.S. Environmental Protection Agency’s region 5, which covers most of the Great Lakes’ states. Graph: Joyce Foundation

In Cleveland, the H5 Data Centers’ facility is a state-of-the-art 33,000-square-metre “co-location facility” serving multiple Ohio business centres whilst availing of the state’s data centre sales tax exemption.

Emails from Great Lakes Now seeking comment on its Cleveland facility’s water usage were not responded to. But whether it directly uses nearby Lake Erie water sources or not, it’s located in a municipal area that does draw water from the lake.

“Where a data centre is pulling [water] from a municipal system, there’s no tracking or reporting requirement. Information I’ve relied upon says that less than a third of data centres are actually tracking how much water they are using; they are not required to,” said Volzer.

“The only time we have information on water usage is when a data centre was pulling groundwater and therefore needed a consumptive use permit.”

What happens to the water after it is used in data centres depends on the type of cooling method deployed. Closed-loop cooling systems typically see the water cooled and recycled, although the cooling element of that process creates an energy demand. Data centres using evaporative cooling systems see more than half the water evaporating, with the rest, being warmed water, discharged into wastewater treatment systems.

“That raises the question of whether we have the wastewater treatment facilities to handle this,” said Volzer.

She adds that Illinois, New York and Minnesota have bills proposed that would require data centres to report water usage.

“But that only comes after the data centre has been sited and is in place and is operating.”

Experts say non-disclosure agreements signed by the involved parties mean that the amount of water proposed to be used at a new data centre is often unknown at the outset of a project. Hyperscale data centres that use evaporative water cooling systems see more than half the water used disappear into the atmosphere as it is heated. And while the closed-loop cooling systems such as those proposed by Microsoft in Mount Pleasant don’t need a constant supply of new water, they present a massive load on local energy infrastructure, which in turn regularly rely on water for cooling. 

“We don’t know and can’t calculate what percentage of that is being driven by data centre growth,” said Volzer.

‘It’s the definition of putting people first’

In a time when the digital world and artificial intelligence appear set to increasingly shape our futures, getting on the data centre train is seen as important for many communities so as not to be left behind.

For towns in southwest Michigan such as Benton Harbor, offshoring and technological advances in past decades have gutted a once-thriving manufacturing sector that served as a cornerstone for thousands of jobs. Today, scores of Michigan communities have yet to bounce back.

“It’s the economy of the future. As we are looking at what’s next for us in southwest Michigan, the knowledge economy is where you want to be,” said Representative Joey Andrews, who has sponsored legislation facilitating the development of enterprise data centres in Michigan.

“These are huge property taxpayers everywhere they go, and Benton Township is a pretty low-income community. This would represent a pretty massive windfall for the township in terms of their tax base, as well as [for] the school district, which is one of the poorest in the state.”

He said that construction jobs could also be a huge bonus for a community where the poverty rate is well above 20 per cent. Meanwhile, the Benton Harbor water treatment system operates at only around 10 per cent of capacity because of population and manufacturing losses.

“There’s actually a ton of water capacity in the Benton Harbor area right now to the point where the water treatment plant is actually on the verge of bankruptcy because they don’t have enough water customers to sustain the size of the operation that was put up there decades ago. I think this actually represents a potential saviour for the water system.”

As well as Lake Ontario, Lake Erie, seen here in Leamington, Ont., also hosts a series of data centres at its shore, particular on the U.S. side. Photo: Kati Panasiuk / The Narwhal

In 2023, Michigan vowed to source 100 per cent of its utility scale energy from renewables by 2040, although some environmentalists say new laws encouraging data centres could thwart that goal.

“If people are saying ‘Put the people first,’ they should want the enormous taxpayer who will create a ton of construction jobs and potentially bail out the water treatment centre and the local school system,” said Andrews.

“It’s the definition of putting people first.”

The Great Lakes-St. Lawrence River Basin Water Resources Compact, with limited exceptions, protects communities from diversions of Great Lakes water, sets water conservation and efficiency goals and establishes a reporting system to track water usage.

Observers such as Volzer don’t see that as coming under threat by the growing presence and pressure on water resources posed by data centres.

What’s more, the types of technological advances proposed by Microsoft in Mount Pleasant, which has promised to build a 250-megawatt solar array in Wisconsin, could cut down on water demand.

But in some Great Lakes communities, opposition to data centres has fuelled real action.

In March, the city of Valparaiso, IN, abandoned plans to facilitate a data centre following significant opposition from locals.

What’s more, market dynamics are constantly shifting, meaning multibillion-dollar projects, whether to build data centres or semiconductor plants, are often the first to be put on pause by major multinationals. In December, Microsoft announced that work on parts of its proposed data plant at Mount Pleasant would be paused to “redefine its data centre design.”

As such, experts say it’s difficult to put a number on how many more data centres are set to come online across the Great Lakes region in the years ahead.

But with the global artificial intelligence industry set to be worth more than US$390 billion by 2030, for communities struggling with a lack of funds and outdated infrastructure, there may be no other choice.

Last August, Benton Harbor city authorities tried to convince state regulators to provide tax cuts that would help the proposed data centre project come to fruition. In November, Michigan lawmakers approved a bill that exempted major data centres from sales and use taxes until at least 2050, and in January, Governor Gretchen Whitmer signed the bill.

“In that package, if a data centre is going to be availing of those incentives there’s a requirement that the data centre hook up to municipalities with existing capacity,” said Volzer.

For Pinkney, that likely presents challenges for Benton Harbor residents and leaders.

“The tax breaks [for the data centre company] are going to be huge. There’s no real plus, for me,” said Pinkney.

“I believe that regardless of what we think or what we do, it’s going to happen. Because the powers that be want it.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

The Heiltsuk Nation was able to confidently harvest sockeye salmon for the first time in years, distributing around 500 fish within the community — in large part due to a new monitoring system that relies on artificial intelligence, or AI.

The remote community on the central coast of B.C. has been abstaining from fishing sockeye because they didn’t know exactly how the population was doing. They could tell it had declined, like many salmon populations across the province have in recent decades, but they weren’t sure by how much. That’s because while salmon have plummeted, so has the federal budget for salmon monitoring, leaving First Nations to rely on delayed or incomplete data. So Heiltsuk took matters into their own hands.

Last summer, Heiltsuk fully implemented a new AI counting system at their fish weir on the Koeye River, in the Great Bear Rainforest. It can count exactly how many salmon are passing through 24 hours a day, and even identify specific species. The nation was able to use this data to forecast how many sockeye would return, and then they were confident in the decision to harvest, according to William Housty, associate director of the Heiltsuk Integrated Resource Management Department. Their harvest of about 500 salmon allowed them to distribute three sockeye to each Heiltsuk household with Elders and two sockeye for other homes, Housty explained.

It’s nowhere near historic levels of harvest, but families were still jubilant.

“In this day and age, when the sockeye salmon stocks in general are so depleted, it’s up to about $20 a sockeye, and it’s not local sockeye. I didn’t realize it, until we got to the point of distribution, where people were so darn excited to get three sockeye. You’d think they’d won the lottery,” Housty said.

About a dozen First Nations are working with scientists to train AI models to recognize how many salmon are returning in real-time. It could revolutionize how First Nations fish and steward salmon, offering critical information for managing populations struggling from habitat loss and warming temperatures. 

The team of First Nations, the Wild Salmon Center, Simon Fraser Computing Sciences and the Pacific Salmon Foundation developed SalmonVision, harnessing the power of artificial intelligence to identify and count salmon. At the Kitwanga weir, operated by the Gitanyow Fisheries Authority, salmon pass through as SalmonVision recognizes and counts them. Photo: Gitanyow Fisheries Authority

Most often, communities don’t know exactly how many salmon are passing through a waterway at any given time. Fisheries are harvesting based on preseason forecasts from Fisheries and Oceans Canada, commonly called DFO, or without any information about abundance at all. Data analysis is completed weeks or months after the fishing season. In waterways where people manually count fish (for example, at fish-counting fences), the work is labour-intensive, expensive and slow. Decades of budget cuts at DFO have greatly reduced the number of streams being monitored, even though wild salmon populations have been on the decline. All of these factors make it harder to access up-to-date information for salmon management.

By combining AI with traditional First Nations technologies, communities hope to learn exactly how many salmon are making it back to spawn. This information will give First Nations reliable, accurate data to decide how many salmon they can safely harvest each season, as well as when they need to hold off and let more salmon spawn to sustain future generations.

“Now that we’re using this technology combined with our traditional weir methods, the amount of accuracy is amazing,” Housty said.

With AI monitoring, First Nations will have more up-to-date salmon data than DFO

Will Atlas, a salmon watershed scientist at the Wild Salmon Center, has been working with Heiltsuk and other First Nations for years, as well as partners at Simon Fraser Computing Sciences and the Pacific Salmon Foundation, to get AI monitoring projects off the ground. When these programs are fully up and running, these First Nations will have more accurate and timely data than DFO, Atlas said.

“Having high quality, in-season data should put the nations in the driver’s seat,” he said.

“Knowledge is power when it comes to fisheries decision-making. For the nations to have these tools at their disposal — I think it’s a big game-changer.”

Heiltsuk ran a pilot in 2022, but 2023 was the first time the program was operating the whole season. Housty said he is able to sit at his desk in Bella Bella and watch the sockeye salmon swim through while the program produces real-time data.

The technology works by outfitting fish passage boxes with high definition cameras. The cameras are solar-powered and the results are communicated by satellite. Led by Atlas and a team of computer scientists at Simon Fraser University, they developed and trained the technology to perform object detection and multi-object tracking to count salmon and differentiate salmon species — a tool they’re calling SalmonVision.

Cecil Brown (left) and Will Atlas gather water close to the fish weir the Heiltsuk Nation operates on the Koeye River, where they are using data generated by artificial intelligence. Being leaders in having accurate, up-to-date data on salmon “should put the nations in the driver’s seat,” Atlas said. Photo: le colibri STUDIO / Wild Salmon Center

Atlas and a team of co-authors published their results from working with the Gitanyow Fisheries Authority and Skeena Fisheries Commission in September. For this project, they reported their top performing model achieved a “mean average precision” of 67.6 per cent, with species-specific scores of over 90 per cent for coho and over 80 per cent for sockeye. They achieved these results with a combined dataset from weirs on the Kitwanga River and Bear River.

Janvier Doire, one of the study’s co-authors who works as a fish biologist for the Skeena Fisheries Commission, pointed out how empowering it is that “it’s not DFO coming in with their data.”

The data is “owned and produced” by First Nations, he said. “It gives them autonomy and independence.”

The upfront cost is $50,000 for the equipment and installation — but the longer the system is running, the less expensive it becomes per year, according to Doire. In addition to getting the upfront cost, the training itself takes a while and installation in a remote area can be challenging and expensive.

“We’ve been learning on the fly, we’ve been failing, we’ve been trying again, and I think we’re finally to the point where we really know what it takes to get a video system built and installed and reliable,” Atlas said.

AI can fill in ‘major data gaps’ about the state of salmon

The Heiltsuk Nation plans to generate a baseline of data to get a clearer picture of the state of salmon coming through its weir in the Koeye River, but the nation will also contribute to a larger effort to understand fish populations. 

Atlas has long focused his efforts on advocating for in-river fisheries, which encapsulates a number of traditional First Nations fishing techniques like weirs, fish traps and fish wheels. In-river fisheries target specific populations and First Nations fishers are able to harvest according to how many fish they know have returned to spawn. This is a more selective approach than marine fisheries, which intercept many populations in the ocean and harvest before knowing how many fish will return to spawn.

This slew of AI pilot projects were partly funded by grants to the Pacific Salmon Foundation from the British Columbia Salmon Restoration and Innovation Fund (which is jointly funded by the provincial and federal governments) and the RBC Tech for Nature program. The Pacific Salmon Foundation is another partner in this endeavor. Katrina Connors, director of the foundation’s salmon watersheds program, said in addition to using AI to improve in-season estimates of salmon, they similarly want to improve in-season monitoring of habitat.

The foundation is working with First Nations to use drones to identify cold areas in streams that can act as refuge for salmon, as well as measuring stream temperature and flow.

Connors said the partners hope to see these projects expand to more First Nations, bolstering Traditional Knowledge and infrastructure that’s already in place with machine learning technology that can be tailored and adapted to different locations.

“This [pilot project] was really proof of concept,” she said. “The next phase, how can you scale this up?”

The partners in each pilot project have had to install solar-powered remote cameras, which are communicated by satellite. In 2023, the Heiltsuk Nation ran the first complete season using SalmonVision at the Koeye River fish weir (right), which is made of steel. Photo: le colibri STUDIO / Wild Salmon Center

Most often, the salmon populations that are well-monitored are commercially important populations, Connors explained. She believes this shift to using new technologies like drones and AI can allow communities to bolster their own local, small-scale monitoring. 

“That is huge because there are major data gaps for salmon throughout B.C.,” she said.

According to Pacific Salmon Foundation data, the number of streams on the north and central coast of B.C. that are routinely monitored has declined by 50 per cent since 2006.

Hope in the face of habitat devastation and heating waters

Many salmon populations First Nations have relied on for generations are a fraction of the size they once were, due to the impacts of industrialization and colonization. Other culturally important species, seen more as non-human relatives with specific relationships to different nations, have declined so much they can no longer be a reliable food source, from caribou in the interior to clams on the coast.

For salmon, there is “no one factor that’s to blame” for widespread decline, Doire explained.

“Some rivers have been devastated by logging, roads, the building of cities, agriculture and dams,” he said. Meanwhile, ocean temperature has increased, which has caused a decline in the quality of prey, and salmon hatcheries are increasing the number of young salmon in the ocean. The result, according to Doire, is “increasing competition for a limited amount of food.”

Using this monitoring technology will increase communities’ “horsepower” responding to these challenges, Christina Service, science lead at Kitasoo Xai’xais Stewardship Authority, said. She said the AI program in the Kwakwa River weir hasn’t been fully trained yet, and the model has to be finessed for variables like water colour and other factors. This year, they will have to manually review the footage and further train the model until they have reliable real-time data.

The Kwakwa River is one of the waterways that has been neglected in terms of monitoring since it’s not home to a commercially important run, Service said.

“Where we built the weir in Kwakwa is one of the most important food fisheries for the community’s sockeye fishery, and is disproportionately valuable on a community scale — but not at all a concern on a coast-wide [Fisheries and Oceans Canada] scale,” she explained.

The river is a “breadbasket” for the community and central to food security, she said. The weir is part of a 3,350-hectare marine protected area encompassing Gitdisdzu Lugyeks (Kitasu Bay) that Kitasoo Xai’xais unilaterally declared in June 2022 — one among a slew of Indigenous Protected and Conserved Areas (IPCAs) First Nations have been declaring around the territories known as British Columbia in recent years.

“The community wants to manage their own resources,” she said.

To William Housty, this project combines Traditional Knowledge and Western science, all with the goal of using these different types of knowledge to strengthen salmon, an important cultural food source. Photo: le colibri STUDIO / Wild Salmon Center

The project leaders are excited at the possibilities of utilizing this technology to transform salmon monitoring, though Housty has still met some people who feel concerns around AI. Housty said one person asked him about the ethics of using AI this way, and he responded he doesn’t see anything unethical because they aren’t relying on the technology to make decisions.

“We’re utilizing the collected data for us. To us, that’s a big difference. We’re collecting the data in the stream daily, the data is uploaded onto the website every day, we can go and look and see how many sockeye passed the fence, and we can make decisions based on that,” he said. “It’s not like the technology is saying ‘You need to do this, you need to do that.’ ”

He said the Heiltsuk have long focused on bringing together Western science and Heiltsuk technology, and this project is “a culmination of that.”

“If we can utilize this sort of technology to better manage sockeye salmon ourselves, it’s going to lead to long-term sustainability for salmon populations that is so desperately needed.”

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