This story is part of a series called Shockwave: Rising energy demand and the future of the Great Lakes. The Great Lakes region is in the midst of a seismic energy shakeup, from skyrocketing data centre demand and a nuclear energy boom, to expanding renewables and electrification. In 2026, the Great Lakes News Collaborative will explore how shifting supply and demand affect the region and its waters.

It’s the summer of data centre controversies in Ontario.

In a season where city council chambers are usually quiet, residents of Hamilton, Oakville, Mississauga, Burlington and Toronto have shown up to public meetings in droves. Many are there to resist proposals for massive new data centres in their backyards, worried about noise, water use and energy bills.

By mid-August, Oakville and Mississauga moved to freeze new data centre construction for a year. Hamilton came within an inch of doing the same.

On Aug. 13, Ontario Premier Doug Ford weighed in. 

Standing in front of a wall of servers at a government-owned data centre in Guelph, Ford unveiled the province’s new “data centre playbook” — and made clear he had little patience for local revolt against the boom he wants to usher in. 

“This is the way of the future,” he said. “Either we do it or Donald Trump’s going to do it, and I’m not giving Donald Trump nothing, absolutely nothing.”

Pushback is also happening in Fergus, Sault Ste. Marie and Armour Township, where a project was cancelled in June in the face of public opposition. Ford calls data centre skeptics “hypocritical,” suggesting residents fighting these projects were “misinformed.”“It just doesn’t add up,” he said, arguing that people can’t rely on artificial intelligence (AI) and cloud storage while also refusing the infrastructure that enables them. 

It was a blunt, campaign-style pitch for a $122-billion industry that has been lobbying hard to take root in Ontario, attracted by its clean electricity grid, temperate weather and proximity to the Great Lakes (four of the five count shorelines in the province). But the data centre push has sparked real concerns about the very few rules governing these massive facilities, and the resources needed to run them.

It’s a story with chapters being written across Canada — including Alberta, where more than 40 are proposed, and New Brunswick, stirring worries about the impacts on old-growth forests and wetlands. Around the world, communities are making it clear they view the centres and the technologies they enable with increasing caution.

And now Ontario is making moves. The province’s playbook has been posted online for public consultation until Sept. 12. It’s currently just a draft, not yet in force — and the legislature won’t be back to debate it until Oct. 27, after an extended summer break.

Here’s everything you need to know.

What are data centres — and why do they matter so much right now?

Strip away the technical jargon and a data centre is just a warehouse full of computers — racks and racks of servers that store and crunch the data behind everything from your email to chatbots to this very story. 

Whether you like them or not, data centres have become the backbone of the modern economy: cloud storage, artificial intelligence, banking systems, health care and government services all run on them. 

They’re not new — Ontario already has dozens — but artificial intelligence has supercharged their scale and size. Today’s data centres are requesting hundreds of megawatts of power, dwarfing older facilities that ran on less power and used less water to cool their servers. While artificial intelligence has its own tension points (which we won’t get into here, but feel free to check out our AI policy), resource use is the root cause of local concerns around the physical space occupied by data centres.

How does a data centre get built in Ontario?

Energy Minister Stephen Lecce has said the province “welcome[s] data centre entrants” — but that welcome comes with strings attached and an approval process that can take up to three years, maybe more. 

The groundwork for this process was laid out first in Bill 40, formally the Protect Ontario by Securing Affordable Energy for Generations Act — the first law governing data centres among provinces — and further in the new playbook.Between the two, it’s clear that data centres need to prove two things to be able to connect to Ontario’s grid.The first is to prove they will be able to cover the full cost of their own electricity connections and use — something other businesses aren’t required to do — so regular households aren’t stuck covering the cost. To enforce that, Ontario wants to create a new, higher electricity rate for any data centre over one megawatt. Quebec’s version of this rate kicks in at five megawatts, so Ontario’s lower bar would catch a lot more projects.

The second is to show the centre will be good for Ontario’s economy. The playbook lays out a three-part criteria to determine this: what jobs, investments and tax revenue it could bring to Ontario; whether it would keep local data in the province; and whether benefits to the host community outweigh the financial and environmental costs. If a data centre can’t satisfy these criteria, Bill 40 gives the energy minister the power to reject its grid connection request. 

“The bottom line is, if a data centre wants to come to Ontario, it is not your right,” Lecce said in a July press conference as the criteria were unveiled. “We now have the right to say no.”

Data centres also have to get approval from municipalities, which determine zoning and building permits. However, most Ontario municipalities don’t yet have zoning rules that specifically address data centres. This means projects can often move ahead on land already zoned for general industrial use, leaving councils with limited power to say no. 

Notably, data centres in Ontario do not have to go through a full environmental assessment, according to analysis from law firm McCarthy Tétrault. It’s also unclear if the province will enforce the constitutional duty to consult Indigenous communities on proposed data centre projects. 

But the province is ensuring other things. The playbook says the government will favour centres that use quieter equipment. It’s also encouraging companies to build their own power supply instead of relying entirely on the public grid, since that can get them running faster than waiting in line for a grid connection. Doing so would exempt a data centre from the process outlined in the playbook. It may also see data centre projects proposed with on-site natural gas plants, as we’re seeing in Alberta. 

One thing neither the playbook nor Bill 40 makes clear is what size of data centre the new process applies to.

How will data centres impact Ontario’s electricity demand?

Significantly — and the numbers keep increasing with every new forecast. 

In 2024, the system operator forecast Ontario’s overall electricity demand will grow 75 per cent by 2050 — a sharper jump than previously projected, driven largely by factories and data centres. The centres are expected to account for about 13 per cent of that new demand by 2035.

A more recent forecast suggested data centres could eventually make up close to nine per cent of all electricity used in Ontario by 2050.

What are data centres using all that electricity for? To stay running all the time; servers never sleep, constantly processing web traffic and requests. 

The province says it’s already fielding interest in data centre builds that would add up to roughly 30 per cent of Ontario’s current peak electricity demand. 

That’s a lot of energy demand — and brings us to the supply challenge ahead.

Will this increase in data centre energy demand result in Ontario using more natural gas?

Possibly, at least in the short-term future.Most of Ontario’s electricity comes from low-emissions sources like nuclear and hydro power. But when demand spikes, like during a heat wave when those who have air conditioners turn them on, natural gas plants are usually what fills the gap, since they can be switched on and off quickly.

That matters for data centres, which run around the clock. If a facility is drawing heavily during one of those peak moments, it could be leaning on gas power to do it. And that fossil fuel is primarily made up of methane, a potent greenhouse gas driving climate change and the worsened wildfire seasons, floods and other severe weather we’ve experienced as a result.

How will data centres impact Ontario’s water usage?

We don’t know yet. 

Existing large data centres use water-based cooling systems to keep servers from overheating. That means that all the water pulled into a centre absorbs the heat from the servers and evaporates into the air. Any water that doesn’t evaporate is reused and then sent to a local plant as wastewater. In closed-loop systems, water just circulates in pipes that cool the servers, so there is little lost to the air. 

According to one estimate, a single one-megawatt data centre can use up to 25.5 million litres of water a year just for cooling — about what all of the homes in the city of Mississauga use in a day. Many of the data centres being proposed in Ontario are larger than that, which means, depending on their cooling system, they could also be using a lot more water. 

Microsoft is building three data centres in Ontario, which share an estimated total demand of approximately 200 megawatts. One planned in Toronto’s Etobicoke area was approved to use up to about 40 litres of water every second for cooling — that’s about five bathtubs full every five seconds, and 1.2 billion litres a year. A separate Microsoft complex in Vaughan is expected to use about 730 million litres of municipal water a year.

The province’s playbook says Ontario will favour data centres that use water-free or closed-loop cooling and reuse waste heat — for instance, to help warm nearby buildings.

What are Ontario municipalities doing about data centres?

On Aug. 11, Oakville became the first Ontario municipality to pass a one-year pause on building new data centres. Mississauga is set to follow suit. Both were facing major AI data centre proposals, or at least land acquisitions that suggested them.

Other municipalities are taking different approaches. Hamilton voted down a proposed pause. Burlington and Waterloo Region have asked staff to review existing rules and impacts. Both, along with Toronto, have asked the province for clearer regulations. Centre Wellington and Sault Ste. Marie are sussing whether they can pass temporary bans.

Ford has resisted calls for a province-wide ban, saying local councils will still have a say and that he’d “rather go to a willing host.” While Ontario law requires municipalities to indicate their support before a wind or solar farm can be developed (usually through a council motion or resolution), no such formal rule was proposed in the data centre playbook.

What does Doug Ford mean when he says Ontario needs data centres to address ‘data sovereignty’?

Both Ford and various companies aspiring to build data centres in Ontario have framed this push as a matter of national security: keep the servers here or risk losing control of Canadians’ data to countries like the United States. 

But it’s harder said than done. Yes, building data centres would mean Ontarians’ data is kept in Ontario physically. But what actually determines control over data isn’t the building’s location — it’s who owns the company running it, and which country’s courts and laws they’re accountable to.

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Summary

• The Alberta government is hoping to attract $100 billion worth of data centres to the province over the next four years. If built, the data centres would require enormous amounts of electricity to operate.
• With a cap on how much electricity data centres can purchase from the provincial grid, most will have to generate their own power by burning natural gas, a fossil fuel.
• A global surge in demand for natural gas plant infrastructure is driving up costs and extending wait-lists, calling into question how realistic Alberta’s data centre ambitions are.

The Alberta government has big ambitions for AI data centres, but those dreams will have to contend with the harsh reality of a heated global competition for electricity. 

Around the world, there is a shortage of turbines used in natural gas power plants, as more and more electricity generation is built to feed hungry data centres. Estimates for wait times to obtain the critical components are now upwards of five years. Prices have also increased dramatically. 

That has serious implications for Alberta’s plan to attract $100 billion worth of data centres over the next four years, not only in terms of how quickly the facilities can be built, but also at what cost. 

As if to drive the point home, the province joined private industry on July 2 for the announcement of the $4.6 billion Greenlight natural gas power plant, which is 2.6 times more expensive than a similar sized power plant completed by the same company two years ago. That plant will feed electricity to a $15 billion Meta data centre.

“We’re definitely seeing the impact of that turbine supply crunch,” Will Noel, senior electricity analyst with the Pembina Institute, says. 

These power plants burn natural gas, a source of the potent greenhouse gas methane, to spin turbines that generate electricity. Natural gas power generation accounts for approximately 77 per cent of Alberta’s electricity grid.

The turbine shortage comes on the heels of the province’s overhaul of its electricity market, a move that has stalled power plant investment as companies wait for more certainty before committing. It also follows the government’s crackdown on renewable power generation, which decimated the market for wind and solar in Alberta.

Data centre developers face lengthy waits and a highly competitive process if they want to connect to Alberta’s grid, but can move quickly if they build their own power supply — which the grid operator requires to be natural gas, at least for now. 

The operator, in response to questions from The Narwhal, said that’s because developers must be able to meet their power demand at all times.

“Renewables and stand-alone storage are currently excluded because of weather dependency and duration limitations,” a spokesperson said by email. “As of now, they are not qualified to reliably offset a data centre’s around-the-clock draw the way dispatchable gas generation can.”

New technologies could change that, according to the operator. 

If the proposed data centres don’t already have their turbines ordered, it’s going to be a long wait. 

Noel says we don’t actually know how many of the 41 data centre centre proposals in Alberta as of July 7 have finalized designs and parts on order. It’s also not known if any will eventually connect to the grid. 

“This is obviously speculation,” he says, “but I imagine most of these data centres don’t have turbines ordered.”

The global turbine shortage

Across the world, but particularly in the U.S., data centres are being built at a furious pace. That, along with a broader turn to electrification and production challenges, is creating a bottleneck for turbines and additional power plant components. 

A report from Bloomberg says the cost of building a natural gas plant in the U.S. increased 66 per cent between 2023 and 2025, while the time it takes to complete construction has increased 23 per cent in the same time period. 

The pressure to build and the lack of components is creating bidding wars on turbines and swelling the bottom lines for turbine manufacturers.

GE Vernova, one of the few large-scale turbine suppliers, saw significant growth last year and into 2026, and has a backlog of orders that account for 100 gigawatts of potential power supply. (For reference, that’s nearly one-third of the electricity the entire city of Calgary uses in a year.) 

All three of the major turbine suppliers are reporting delays.

That supply crunch has led some data centre developers in the U.S. to go to extreme lengths to get power, including repurposing old jet engines. 

Noel calls those fixes “inefficient and very costly,” but notes “the revenue they’re getting from the data centres is outstripping the extra cost, so they’re just kind of doing what they can to get any power on site as fast as possible.”

In Alberta, a power surplus could quickly evaporate

There is nothing to that extent happening in Alberta, which quickly instituted a hard cap on how much power was available to data centres from the existing power grid.

The Alberta government has embraced the AI boom as a way to increase demand for the province’s vast natural gas reserves. 

“Jurisdictions that can provide reliable and affordable power will have a serious advantage in attracting investment, and with our vast natural gas resources and mature industrial infrastructure, that is exactly what Alberta can offer,” Premier Danielle Smith said while announcing the recent Greenlight project.

The Alberta Electric System Operator, which manages the province’s private grid, allocated 1.2 gigawatts of power for data centres in a competitive process that ended with two developers allowed to tie into the grid. 

Another round will dole out additional power and the system operator recently announced data centre developers planning to build their own power plants could temporarily tie into the grid while those plants are being built, up to 1.6 gigawatts. 

The operator said by email that the “bridging provision” is a “general mechanism accommodating a time gap (up to three years) between a load being ready to operate and its generation being fully built and in service for any reason.”It is up to the developer to ensure it has the necessary power after that three-year window and if there is a power shortage during those three years, data centres using the bridging provision would be the first to have electricity curtailed. 

The province also has a healthy cushion of extra power after a buildout of capacity prior to market reforms and a renewable crackdown. But that won’t necessarily last. 

Noel points to the insatiable data centre demand and resulting supply crunch, combined with population growth and increasing electrification as pressures on the system. 

“And then we’ve got the old coal plants that were converted to run on gas — those are coming up soon on their end of life,” he says. “So I think mid-2030, if we don’t kind of deal with this now — whether it’s more gas or more renewables or whatever — I think there’s a real possibility that we will go from flush with power to just scraping by again.”

The office of Alberta’s minister of affordability and utilities, RJ Sigurdson, didn’t reply to specific questions about the turbine shortage and its impacts, but said the government prioritizes the “well-being of Albertans” and “will not compromise the reliability or affordability of the electricity that millions of Albertans, Indigenous communities and our local industries depend on.” 

The minister’s office said the government “does not prescribe a specific generation technology for powering data centre projects.” It said the decision by the grid operator to limit generation to natural gas at this time is an independent decision by the arm’s length body. 

The Alberta Electric System Operator says its role is to ensure the safety and reliability of the grid and it does not track whether private developers have ordered the necessary equipment.

So what does this all mean for Alberta’s AI data centre dream?

The Narwhal reached out to all of the big natural gas generators in the province to see if they were being impacted by turbine delays and cost increases, but received no responses. Emails to two data centre developers, Beacon Data Centers and Synapse, also did not get a response. 

It can be difficult to assess how the various companies could be impacted by the current race for power plant components, but applications to the Alberta Utilities Commission, the regulator for power plants, provide some insight. 

Synapse, which hopes to start construction on a data centre near the town of Olds in October, hasn’t disclosed who will build its turbines, but says once final decisions are in place, it could have them on site within a month. It plans to use modular generators, operating alone, before completing construction of a full system while the project is online.

In the company’s application to Alberta Environment and Parks, Synapse says it will use generators from Alberta-based Eco Power Equipment, which specializes in portable gas generators. Eco Power said it doesn’t manufacture turbines. 

Another data centre moving through the regulatory process is Beacon Data Centers’ Indus project, southwest of Calgary. 

Its application to the regulator shows details on turbine components and has a target of Dec. 31, 2028, for completion of the project, pending approval.

Alberta’s electricity market overhaul stalls investment as companies wait for more certainty

As those projects move through the regulatory process, large electricity generators remain cautious about building new projects to help keep the lights on.

There are also questions about how the data centre boom could impact prices. Premier Smith says the Greenlight project could help bring down transmission costs, which ultimately show up on electricity bills. Noel agrees that’s possible. 

But the flip side is increased demand for natural gas and the trickle down of massive cost increases for building power plants could potentially increase electricity or heating bills. 

“I think everyone’s kind of sitting and waiting to see how the [restructured electricity market] plays out,” Noel says. 

“In 2028 we’ll phase out the old market and bring in the new, and maybe then we’ll start to see investment, but that’s a pretty long time.”

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.

Editor’s note: It has come to The Narwhal’s attention that this story has been circulated via stickers that have been distributed in Saint John. The Narwhal had no involvement in creating these stickers.

Summary

• An AI computing company is proposing to fill in a wetland to build a massive data centre near the neighbourhood of Lorneville in Saint John, N.B.
• Once operating, the data centre will be one of New Brunswick’s largest carbon emitters and devour about 390 megawatts of electricity — more than 10 per cent of the province’s total energy demand.
• Residents of Lorneville are resisting the proposal, but provincial and municipal leaders have expressed support, arguing it will bring jobs and revenue to the region.

On a sunny Saturday in April, Adam Wilkins and Chris Watson trace a path through a forest a short distance from the Bay of Fundy. 

As he walks down a slope, Wilkins wonders aloud whether cleaning out the ditch upstream would make the trail easier to run on; for the past decade, he and his wife have been building forest trails in this area, to encourage more outdoor recreation and stewardship.

After about 10 minutes, at a fork in the path, Watson stops, pointing at the forest ahead: the area slated to become the site of the first hyperscale data centre in Atlantic Canada. That is, a data centre with massive scalable capacity, like those Apple, Google and Microsoft are building.  

For years, the City of Saint John and the New Brunswick provincial government have been working to expand an industrial park in Lorneville, a coastal community on the outskirts of Saint John. A $2-billion data centre built by Alberta company Beacon Data Centers and partially powered by a new gas plant is slated to be the first tenant.

Data centres provide the material backbone for cloud services, file sharing and artificial intelligence. A customer for Beacon Data Centers’ proposed New Brunswick facility has not been announced.

Officials have said Lorneville is an ideal location for business development, as the area offers large amounts of land and water, as well as abundant electricity and accessible fibre cables. The municipality has also said developing Lorneville would bring much-needed jobs and tax revenue to the city; the local Irving Oil refinery exports most of its products to the United States, while New Brunswick generally sends most of its seafood and lumber south of the border, making Saint John “Canada’s most tariff-exposed city” according to the Canadian Chamber of Commerce. 

Officials initially stated that they were actively attracting businesses to the expanded industrial park that would be focused in “green and clean” sectors. But residents have pushed back, noting that expansion of the industrial park, and construction of the data centre itself, would destroy rare old-growth forest and wetlands. If built, the data centre would rely on a gas plant for much of its power, making it one of the province’s largest emitters, while also increasing demand on the grid. And residents say the process to develop the data centre has suffered from a lack of transparency.

Documents obtained through provincial access to information legislation by The Narwhal and by residents show provincial officials were in discussions to bring a data centre to the park long before residents were told about the tenant — and that details of that data centre conflicted with the more low-impact vision for the industrial park advertised to residents.

Building AI data centres across Canada has been identified by the federal government as a priority, and dozens of new facilities have been proposed in the past year. Since early May, Beacon Data Centers has lobbied various federal departments four times to advocate for the role of data centres in supporting “national priorities,” and to request government support for the New Brunswick project. But many communities are concerned about environmental impacts of the water- and power-hungry facilities, as well as the lack of oversight and transparency regarding their impacts.

“For the past two years, this fight has been a huge stressor for people,” Wilkins says. “It’s all in the name of progress, or we need the taxes, or you need AI to generate your stupid images, but it impacts people’s lives.”

Data centre proposal reopening old wounds in Lorneville

This spring, billboards and bus ads began appearing around Saint John, promising the creation of 1,200 jobs from construction of the 390-megawatt data centre — an appealing prospect in a city reliant on trade with a volatile United States and a province facing a grim financial forecast.

But in those signs, many Lorneville residents saw something troubling. 

Lorneville was once a fishing village perched on the Bay of Fundy’s rocky shoreline. In the 1970s, a 3,600-hectare chunk of land along the coast was expropriated by the provincial government to develop an industrial project that — apart from a power plant built on the water — never materialized. Residents say a promise they were given to return the land if the project didn’t move forward never came to fruition either.

“My grandparents were still getting upset, even talking about it, until the day they were gone,” Cecil McCavour, whose family has been fishing in Lorneville since the 1840s, told The Narwhal. McCavour, along with his dad and cousin, are the last fishermen working from the community’s wharf. His family lost hundreds of acres to expropriation, he says. Now, the data centre is reopening old wounds. “Every decade something’s coming down the pipeline that does damage to our community.”

In subsequent years, a dump was established in the area, but was found to be insufficiently lined for modern-day standards, creating concerns contaminants were seeping into the groundwater.

Then, in July 2024, residents received letters in envelopes with no originating address. A consulting agency hired by the province stated that a proposal to clear and construct a 110-hectare “development-ready pad” for industry a short distance from their homes was in the works.

Instead, residents resisted, submitting dozens of letters, collecting hundreds of signatures and packing council meetings at which the expansion was debated. In response, the City of Saint John — which was pursuing the expansion along with New Brunswick’s Regional Development Corporation — paused the plan and initiated a task force in which residents and city officials were meant to work through concerns. 

Residents were not told which specific industries were being considered for the expanded industrial park, or if any potential tenants had come forward.

The documents obtained through access to information legislation by The Narwhal and residents show that before the task force began meeting, provincial officials were already in discussions to bring a data centre to the park. In emails from October 2024, Martin Luckett, an official with the province’s business development agency, Opportunities NB, wrote to a redacted recipient that the agency felt “strongly that there is considerable potential for one of your centers here in New Brunswick,” and describes the Lorneville area as a potential location. By November 2024, Beacon Data Centers had submitted a feasibility application to NB Power, according to emails. 

In May 2025, city council voted on whether to allow the expansion after a series of tense council meetings that stretched late into the evening. Dozens of people spoke out against the plan, while just three speakers spoke in favour. Still, the council voted unanimously to allow the expansion.

City staff initially attempted to assuage residents’ concerns by affirming businesses in the industrial park would be green and non-emitting. But the data centre — which was announced in October 2025 — has made people doubt that commitment, Wilkins says. “The first thing announced was a hyperscale data centre powered by a natural gas plant … what else is coming?”

Old-growth forests, wetlands would be cleared for data centre

In 2024, Chris Watson bought a house beside a large saltmarsh in Lorneville, recognized as a “provincially significant wetland” for its ecological value . In the forest behind his home, eastern cedar shade mossy swamps, while gnarled red spruce with lichen-covered branches grow nearby.

Watson was surprised when he read the environmental impact assessment for the industrial park expansion, which includes the forest behind his house, describing it as relatively low value.” His own observations, though not expert, suggested at least parts of it were exceptional.

He bought a tool for taking cores and gathered samples from the largest trees. Ben Phillips, who runs a dendrochronology lab — focused on the science of dating trees by their rings — at Mount Allison University, agreed to take a look.

Phillips was initially skeptical. Only about half a per cent of the forest in New Brunswick is old growth, he says, and most of that is found in inaccessible areas.

But examining the cores under a microscope, Phillips was astonished. 

In the oldest sample, Phillips counted 388 rings, meaning the tree was likely more than 400 years old, as it would have taken more than 12 years to get to the point from which the rings were counted. Other samples showed trees that were more than 300 years old, and many over 200 years — an age distribution typical of an old-growth forest. “[Old growth] is a mixed age, multi-storied stand that’s got lots of diversity in it,” he says. “This fit that exactly.”

The forest at Lorneville is likely the third-oldest forest in the province, Phillips says. Yet there’s no guarantee it will be spared. “These global pressures from big tech firms and AI and data centres and tariffs … are winning out against old-growth forest because we do not have a policy in place to protect it.”

The mayor of Saint John, Donna Reardon, has said she supports saving individual old trees, but declined an interview request for this story. The site for the data centre is specifically adjacent to, and partially overlapping, the industrial park expansion area, and wouldn’t flatten some of the oldest trees Watson found. But a more recent environmental assessment for the data centre itself stated that approximately 3.5 hectares of old-growth forest would be lost as “a long-term, irreversible, adverse effect of the project.”

The forest isn’t the only ecological concern. Much of the Lorneville area is made up of wetlands, including roughly 27 hectares in the area that would be cleared and infilled to make space for the data centre.

“This is basically the high point of the watershed,” Watson says, inspecting one of those wetlands in April — a peatland bog in the area behind his house. At the bog’s edge, Watson says he’d found trees that were 200 years old, suggesting an ecosystem that has been evolving for centuries. “What’s going to happen when all that freshwater flow is removed from this area?”

Roxanne MacKinnon, executive director of ACAP Saint John, an environmental non-profit organization, says the development of wetlands throughout Saint John already causes localized flooding.

“Wetlands are a very important part of our ecosystem,” she says. “From our perspective, the degradation of habitat, and particularly where all that water is going to go that is being contained within these wetlands currently, [is] a concern.”

For residents, there’s also the question of what the loss of wetlands will mean for their wells.

The initial expansion area for the industrial park would have infilled dozens of hectares of wetlands. A 2025 email from provincial engineer and hydrogeologist Gerard Souma to a New Brunswick environmental impact assessment specialist, obtained by residents through access to information legislation, noted this could affect the community’s older wells. Souma wrote, “It is my opinion that any owner having a well tapping their water supply from the surficial aquifer should be concern [sic] with 44 ha of wetland infilling by the project.”

Watson worries that the wetland infilling for the data centre could also affect downstream wetlands like the significant saltmarsh by his house, by changing the way water flows on the landscape.

In a statement, Lauren Armstrong, Beacon’s vice-president of corporate affairs, wrote that the wetlands at the site of the data centre have been assessed and categorized through the impact assessment, and that “the overall approach is to minimize the footprint, avoid the most sensitive areas and manage remaining effects.”

New Brunswick’s Regional Development Corporation referred a request for an interview to Saint John Industrial Parks.

If built, Saint John data centre would be one of the largest emitters and power users in the province

While the project stands to raze local forests and wetlands, it may also have broader impacts across the province. 

The proposed data centre is a 390-megawatt operation. Once built, it would also generate roughly 6.6 per cent of emissions in the province.

Part of the data centre’s energy is meant to come from an on-site natural gas-powered generation facility, built by Houston-based VoltaGrid, with the other 200 megawatts coming from New Brunswick’s grid. This demand could surpass 10 per cent of New Brunswick’s mean energy demands, where peak daily demand for electricity ranges from around 1,500 megawatts on a summer morning to roughly 3,030 megawatts on a cold winter’s day.

Beacon submitted a feasibility assessment for that grid demand in November 2024. In May 2025, emails from municipal and provincial officials displayed frustration with NB Power’s slow response. “This has not been the best first impression to say the least,” wrote Saint John Industrial Parks general manager Ian MacKinnon, to officials from Opportunities NB and Envision Saint John, the city’s business development group. “Nothing will proceed without a response and a commitment for power.” MacKinnon did not respond to a request for an interview.

Meanwhile, Opportunities NB wrote a letter to NB Power asking about the feasibility review, saying Beacon is “ready to progress their project in Saint John but can’t commit to anything without a path forward with NB Power.”

At that same time, NB Power and the U.S. company ProEnergy were putting forward an application for a controversial 500-megawatt, 10-turbine natural gas and diesel power plant in Tantramar, in southwest New Brunswick, to cope with rising electricity demand. 

That power plant, which was just approved by the province’s Energy and Utilities Board, would produce around 900,000 tonnes of carbon dioxide a year, according to its environmental assessment.

VoltaGrid has said its gas plant on the data centre site is not at all related to the larger ProEnergy plant. NB Power put out the request for proposals for the gas plant in 2024, a year before the data centre plan was announced, though the same year Beacon submitted its feasibility application to the provincial utility. 

Still, advocates say the potential data centre has bearing on decisions about power generation. 

David Coon, leader of the Green Party of New Brunswick, says from his perspective, the projects are connected insofar as powering the data centre requires the ProEnergy gas plant. “There isn’t an extra 200 megawatts of capacity available on the grid to carry that load,” he says. “So it’s got to come from somewhere and that means they’ve got to build it.”

Watson wonders why officials were asking for grid approval of an energy-intensive facility at the same time the utility was forecasting an energy deficit by 2028 due to population growth. 

Meanwhile, VoltaGrid’s 190-megawatt natural gas-generating facility would produce roughly 750,000 tonnes of carbon dioxide annually, making it one of the province’s most prolific emitters, behind the Irving Oil Refinery and the Belledune coal-fired generating station.

VoltaGrid CEO Nathan Ough did not respond to a request for an interview, but Lauren Armstrong, with Beacon Data Centers, said in a statement that “the project is being designed with a combination of measures to reduce and manage emissions intensity over time. These include high-efficiency generation technologies, operational optimization, and the ability to integrate lower-carbon energy sources as they become available.”

Given the potential effects on power rates, on the province’s emissions targets and on the community, Coon is calling for a moratorium on data centre development until legislation can be developed for the industry. “The concern that everyone has, including me, is the costs will far outweigh the benefits of this, the way it’s being pursued.”

In a statement, Luke Randall, the minister responsible for Opportunities NB, said that projects like the data centre have the potential to contribute to the provincial economy by creating jobs and revenue for public services. These projects “will only proceed if they deliver clear economic value, align with environmental expectations and contribute meaningfully to the province’s long-term development.”

Randall also stated that Opportunities NB is “aware of the broader discussions regarding electricity supply and future demand. That is precisely why projects like this are subject to rigorous review, including technical analysis, environmental assessment and regulatory oversight.” 

In return, Saint John residents are being pitched an economic windfall in jobs and tax revenue, though of the advertised 1,200 jobs, most are in construction, and the figure also includes indirect jobs, which are service and supply-chain jobs created as a result of the data centre project. Just 210 jobs would be permanent, according to the company’s projections.

Lorneville residents say it’s unclear that the loss of wetlands and forest, and the increase in emissions, would be worth it. 

For now, they’re hoping to have the expansion of the industrial park reversed; residents have filed for a judicial review of the area’s rezoning, on the grounds that the city council’s decision was biased. In May, Lorneville resident Sherri Colwell-McCavour, who’s been vocally opposed to the project, was elected to Saint John City Council  — days after a protest in downtown Saint John, at which dozens of people called for a halt to the data centre.

If residents can’t stop the project, they say they intend to continue doing what they can to minimize the effects.

A data centre in the neighbourhood

After touring the wetlands and forest in the data centre footprint, Watson and Wilkins make their way to the road. A few minutes later, Wilkins’ wife, Leah Alexander, rolls along to pick them up. 

Alexander’s family has been in Lorneville for six generations. She has spent her whole life there, and she and Wilkins live just a few houses down from the one she grew up in.

She has vivid early memories of being taken door to door by her mother to advocate against the dump, she says. Now, the threat of the data centre has her strapping her baby to her chest to go to council meetings, and bringing her four-year-old along to hand out flyers.

Alexander has never imagined leaving Lorneville, but the data centre project has her questioning whether it’s a place her family can stay. For now, she’s sad to see the community go through the same struggle it’s faced in the past — and frustrated that they’ve had to do so much work to highlight what’s at risk of being lost: the gnarled and ancient trees, the deep mossy swamps. 

If the systems meant to provide protection are not doing their job, she says, then it leaves residents no choice. 

“People want their children to grow up here,” Alexander says. “They want them to stay here, and what are we leaving them? Like, if we don’t stand up and fight for it, what are we doing?”

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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.”

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. 

“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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Editor’s note: Since this story was published in March, the Alberta Utilities Commission rejected the data centre proposal. The company behind the project filed a new application a month later. This piece takes an on-the-ground look at concerns residents have, but doesn’t contain new developments.

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.

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.

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.

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.

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.

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.

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,[Pause 0.25s] 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.

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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.

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.

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.

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.

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.

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.”

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.”

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.

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.

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.

“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.”

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’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.”

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.

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.

2025 Indigenous editorial fellow Savannah Ridley is nominated for two awards this year: emerging excellence at the Digital Publishing Awards, and the Journalists for Human Rights / Canadian Association of Journalists Emerging Indigenous Journalist Award. While at The Narwhal, Savannah focused on editing and fact-checking, but she did some reporting too — including this excellent piece on the AI data centre boom in Canada, which raises massive questions about how drought-stricken regions will cope.— Michelle Cyca, bureau chief, conservation and fellowshipsIt 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.

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.” 

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. 

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. 

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. 

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.

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.

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.

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.

“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.

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.

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.”

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 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.”

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.