Review of Provincial Regulatory and Engagement Framework for Large Scale Data Centre Development

Data centres are critical infrastructure for Canada. Data centres are part of daily life for all Albertans, supporting activities such as online banking and government services, as well as fields such as health care, finance, scientific research, cloud computing and artificial intelligence.

As noted by the Government of Canada, “the support the health care system, financial services, scientific research and secure government systems that Canadians rely on, and they power the digital economy and artificial intelligence (AI). Canada currently relies significantly on infrastructure and services based outside the country for the compute, cloud and data storage that power AI. Building more capacity here at home will give Canada greater resilience and choice, while helping Canadian researchers, innovators and businesses build, deploy and scale.”

In December 2024, the Government of Alberta released Alberta’s AI Data Centre Strategy: Powering the Future of Artificial Intelligence, establishing a vision to attract significant private-sector investment and position Alberta as a preferred North American destination for AI and data centre infrastructure. The strategy identifies Alberta’s competitive advantages, including power availability, climate conditions that support cooling requirements, and streamlined regulatory processes.

Since the release of the strategy, Alberta has experienced growing interest from major technology and infrastructure investors seeking to develop large-scale data centres throughout the province. These projects represent significant economic opportunities, including construction activity, construction and ongoing employment, local and spin-off economic activity, government taxation revenue, new infrastructure, and new technological innovation. At the same time, they require considerations regarding land use planning, infrastructure capacity, electrical generation and transmission requirements, water use, environmental management, and potential community impacts.

Municipalities are increasingly being asked to evaluate development proposals that involve multiple regulatory bodies. In some cases, uncertainty can arise regarding which level of government is responsible for specific approvals, how decisions are coordinated, and how local inputs will be incorporated into project planning and review. More clarity within a provincial framework would improve transparency, consistency, and predictability for municipalities, developers, and all Albertans.

Recent experience in Alberta demonstrates the need for greater regulatory clarity and more coordinated planning for data centre development. For example, in 2025, Rocky View County Council rejected a proposed large-scale data centre campus near Balzac following significant public concern related to agricultural land conversion, water use, infrastructure impacts, and compatibility with surrounding land uses. More recently, proposals associated with a major data centre development in Olds faced opposition from residents and regulatory scrutiny, with the Alberta Utilities Commission ultimately determining that the proposed site was not suitable for the associated power generation infrastructure. In Sturgeon County itself, a Canadian first data centre was announced for location within Alberta’s Industrial Heartland, an area pre-zoned for major industrial uses for decades and positioned as Alberta’s first designated industrial zone. Although the appropriateness of the area, high development standards, and multiple layers of environmental stewardship were recognized, the announcement generated significant attention and concern around lack of awareness as well.

Recent public discussions surrounding proposed data centre projects have also highlighted concerns regarding the timing and effectiveness of public engagement and education. Supporting Albertans with maximum clarity on all project elements and community benefits is important to advance additional large-scale projects.

On a national scale, the Government of Canada is also active on this file. It recently launched “Canada’s Responsible Data Centre Development Principles”, which require provincial consideration. The principles establish a common national framework for how Canada builds the data centre capacity it needs. The framework sets five clear expectations for data centre projects:

1. 1. Data centres must create lasting local benefits.
   2. Data centres must not shift electricity costs to Canadians.
   3. Data centres must minimize water use and environmental impacts.
   4. Data centres must be transparent about local impacts.
   5. Data centres must bring strategic value to Canada.

The principles are supported by a broad cross-section of Canada’s data centre, cloud, AI and technology sectors. Signatories’ commitments will help grow Canada’s digital infrastructure responsibly and promote a consistent, community-centered approach to data centre development across Canada.

Other provincial governments are also engaged in data centre policy and investment, such as the Government of Ontario which released its draft Data Centre Playbook, establishing a provincial framework that treats data centres as strategic infrastructure while making access to electricity conditional on benefits to Ontario. The Ontario Data Centre Playbook is built around three principles:

1. 1. Data centres must make substantial investments in Ontario and host communities
   2. Proponents must pay the full costs associated with their electricity consumption and any required grid upgrades, and
   3. Ontario will compete using non-financial supports such as expedited permitting and government facilitation rather than direct financial incentives. The framework also evaluates projects against broader objectives including economic development, digital sovereignty, cybersecurity, workforce development, community benefits, and environmental performance.

Alberta’s strategy is primarily focused on attracting investment through streamlined approvals and private sector responsibility for new generation. Grid connections are determined by the Alberta Electrical Systems Operator (AESO), whereas the Ontario government proposes a government-led prioritization process that can determine which large-load projects receive grid access based on economic, community, and sovereignty considerations. the Ontario government also places a strong emphasis on requiring tangible community benefits and advancing Canadian ownership and digital sovereignty objectives. Some of the criteria the Government of Ontario is proposing to use in evaluating grid connections is subjective in nature – likely leading to increased political involvement in decision-making processes. Alberta’s approach is generally centered on reliability, investment attraction, and ensuring that proponents fund the infrastructure required to support their operations, with grid-connections being evaluated objectively through AESO based on technical requirements and system capacity.

While Alberta’s AI Data Centre Strategy provides a valuable foundation for pursuing economic development opportunities, it would benefit from more clarity on industrial siting criteria, setbacks to residential communities, environmental approvals, cumulative effects, digital privacy, responsible use of Artificial Intelligence, water and infrastructure servicing, electricity generation and transmission, public engagement, and community benefit allocation.

No two data centre projects are alike, nor will they have the same impact. Having maximum clarity in regulatory frameworks will strengthen public confidence, support responsible investment, and ensure Alberta remains competitive in this critical sector.