Mark Carney runs into backlash over push to build Canadian data centres

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The federal government argued in its AI strategy that Canada is “uniquely positioned to lead in building this infrastructure responsibly and sustainably.”

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“As demand for AI compute grows, Canada’s approach will be to link new data centre development with clean energy expansion, robust environmental standards, and tangible benefits for local communities,” the document said.

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Balsillie said the challenge with data centres is that, unlike other forms of capital investment, they don’t necessarily spur the same kind of economic benefits to people, while the negative spillovers can be material for communities.

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“It’s a fine line between being strip-mined for low value-add, metaphorically, and capturing high value-added sovereign participation in this era of AI,” Balsillie said.

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Carney’s government unveiled a framework on Thursday to help guide communities’ decisions on data centre development. It said such projects must create lasting local benefits, limit environmental impacts and ensure electricity costs are not pushed onto residents. Tech giants including Amazon.com Inc., Meta Platforms Inc. and Anthropic PBC signed on to the principles.

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BCE Inc. Chief Executive Officer Mirko Bibic applauded the framework, which he said acknowledged the critical nature of AI infrastructure and the need for more domestic compute capacity.

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“On the other hand, there’s an acknowledgement that while we do that, we need to engender trust amongst all stakeholders in the country — citizens, communities, investors,” Bibic said in an interview Friday on BNN Bloomberg.

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Provincial governments are also trying to address concerns surrounding energy costs. British Columbia is restricting electric grid use for data centres and forcing operators to compete for access.

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Energy-rich Alberta’s government has been particularly bullish about data centres and attracted the bulk of Canada’s proposals. Nonetheless, it’s stipulated operators must supply their own power. The province will be home to a $13-billion Meta data centre, set to be the largest in the country.

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Even so, an analysis by the Pembina Institute suggested Albertans could see their electricity bills rise by as much as $460 per year, because the centres would be allowed to connect to the grid before their own generation comes online. The Brookings Institute found data centres create a modest amount of jobs and workers see no wage gain, while home prices tend to rise by 2-5% in communities that harbor the infrastructure.

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“Canada has always been seduced by this promise of jobs, and we’ve given away a lot historically in the past in order to get jobs here. And data centres don’t really have that promise,” said Vass Bednar, managing director of the Canadian Shield Institute, a public policy think tank.

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The Trump Factor

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Federal and provincial officials have also pitched data centres as a necessity to bolster Canada’s sovereignty at a time when tensions are high with the U.S.

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“Ontario has a choice: we can build the economy of the future and ensure Canadians’ data stays in Canada and out of President Trump’s hands, or we can get left behind and risk Canadians’ data being sent down to the U.S.,” Premier Doug Ford said in August.

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But Balsillie said holding Canadians’ data domestically doesn’t necessarily protect it from the Trump administration. Under the Cloud Act, U.S. law enforcement can compel American tech companies to hand over electronic data, regardless of where it is stored.

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“It’s not sovereign if you haven’t got sovereign governance,” he said.

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The Canada-U.S.-Mexico Agreement, signed in 2020, also blocks some restrictions on cross-border information transfers.