The rapid advancement of artificial intelligence (AI) and machine learning is reshaping industries worldwide, with Alberta is emerging as a key destination for AI investments. As nations compete to lead in this transformative field, Canada—and Alberta specifically—offers significant strengths.
Federal support is clear, with the Liberal government's Canadian Sovereign AI Compute Strategy and recent statements by Conservative leader Pierre Poilievre emphasizing bipartisan commitment to AI infrastructure. This ensures that, regardless of the outcome of the next federal election, Canada will prioritize the development of this critical sector.
At the provincial level, Alberta is leveraging its strong and growing technology sector to position itself as a leader. In 2024, the Alberta Government identified the data centre industry as central to its economic diversification strategy. This commitment was reinforced with the release of Alberta's AI Data Centre Strategy, which highlights the province's unique advantages and plans for supporting this vital industry.
The surge in cloud computing, AI and machine learning is driving unprecedented demand for data centres, which require vast amounts of computing power. With national security concerns tied to data storage, the United States and Canada must reduce reliance on foreign-located facilities.
According to Alberta's strategy document, global demand for data centre capacity is expected to more than triple by 2030. Data centre development represents a potential C$75-billion to C$100-billion economic opportunity for Alberta, according to Invest Alberta CEO Rick Christiaanse. The province already hosts over 20 data centres near Calgary and Edmonton, with six additional projects in early stages. These include a C$750-million facility near Calgary and a C$70-billion project in Grande Prairie.
This growth comes with immense energy requirements. Global projections estimate data centres could consume 1,400 TWh annually by 2030, highlighting the importance of aligning development with energy solutions. International developers and local power producers are taking notice, working to address the complexities of scaling these massive projects. Alberta's government remains committed to supporting developers as they navigate these challenges, cementing the province's role as a leader in the industry.
The Alberta's AI Data Centre Strategy is an important element in the province's messaging to industry that not only is Alberta open for data centre and related digital infrastructure development, Alberta has substantial advantages over other jurisdictions which make this province ideally positioned for large data centre development. The strategy emphasizes the following key pillars:
Alberta's AI Data Centre Strategy outlines several proactive steps the province will take to position Alberta as a global leader in AI-driven data centre operations. The initiatives include:
We have a market leading energy and infrastructure practice and regularly advise on large, complex infrastructure and energy projects. Data centre projects will involve multidisciplinary legal skills including in respect of corporate and joint venture structuring, indigenous participation and financing arrangements, critical permitting and regulatory issues, complex commercial agreements including power purchase arrangements, fuel supply contracts, land lease or purchase arrangements (including potential foreign ownership of land issues), procurement, construction and long term service agreements, intellectual property issues, financing arrangements including complex security structures necessary to support the unique issues in data centre developments, and tax and cross border tax matters.
Regarding regulatory issues, data centre developers can expect substantial involvement with the provincial government and its agencies. While Alberta boasts the only deregulated electricity generation market in Canada, the regulatory regime applicable to power generators is in a transition phase. For instance, recent legislative amendments (addressed in our blog, Alberta’s Long-Awaited Electricity Statutes (Modernizing Alberta's Electricity Grid) Amendment Act is Proclaimed) allow industrial users such as data centres to supply their own power and export excess power to the grid; however, the applicable transmission tariff regime for such arrangements has not yet been determined. Moreover, issues related to the development of transmission and distribution infrastructure for the purposes of supplying power to behind-the-fence load continue to be raised in front of the Alberta Utilities Commission. Separately, the Alberta Electric System Operator—responsible for transmission planning and grid interconnections—also recently implemented a new interconnection process that will have implications for parties seeking to supply power to or obtain power from the grid. Notwithstanding self-supply configurations, data centres' high reliability needs mean the availability of and access to demand transmission service (i.e., power from the provincial grid) will likely be an important consideration.
In respect of key commercial matters, data centre projects will involve complex long term power purchase agreement(s). These agreements will involve careful structuring of the credit and related security issues including an analysis of risks at various project levels (data center provider, hyperscaler and potentially end-use customer levels). The commercial structure will need to mitigate credit and interrelated technology risks associated with the projects, recognizing the unique elements of the data centre business and the speed at which technology changes.
Bennett Jones provides comprehensive legal solutions tailored to the specific needs of data centre project development. We have a deep team with the multidisciplinary areas of expertise necessary to support these projects. Explore our Energy, Infrastructure, Construction, Commercial Real Estate, Energy Regulatory, Tax and Intellectual Property practices for more information on the qualifications and experience of our various teams.