The Canadian data centre industry is expected to reach a market value of $9.04 billion by 2029, driven by cloud services, IoT, and big data. The cities of Toronto, Montreal, and Vancouver are considered among the main technological hubs for investment from global cloud providers. This growth is supported by existing sustainable energy sources (green data centres) and next-gen infrastructure. Factors that drive growth in this sector include the development of cloud-based services, the urgency for data storage, scaling in the Internet of Things (IoT), cloud computing, and the big data ecosystem.
There are an estimated 239 data centres in operation across Canada as of 2024. Data centres and their transmission networks consume a significant amount of energy. The rapid growth of AI and its integration across the technology sector (and other industries) means that energy consumption requirements will grow significantly. The Canada Energy Regulator (CER) reported 460 terawatt-hours (TWh) of energy consumed by data centres globally in 2022 (roughly 71% of the energy generated in Canada the same year) and is predicted to double globally by the end of 2026.
Low energy costs are a key feature (and advantage) of the Canadian data centre landscape. Provinces like Quebec and British Columbia have the advantage of readily available and affordability of hydroelectricity, making them key regions for this sector. And the demand for data storage also creates new job opportunities (such as data centre consultant roles).
Canada is also committed to a clean, reliable, and affordable electricity grid, supported by clean energy sources such as hydropower, wind, solar, and nuclear energy. Quebec is the second-largest market for data centres in Canada, with nearly 100% of the energy generated by Hydro-Quebec comes from renewable resources (93% hydro-powered).
Canadian regulations and public policy initiatives may be attractive to foreign companies. Alberta’s 2024 Artificial Intelligence Data Centres Strategy outlines its plan to attract investment in AI data centres in that province. At the federal level, the Canadian Sovereign AI Compute Strategy sees the government of Canada investing about $700 million to support AI growth and capacity. Although the regulatory environment continues to evolve, Canada and its government are active in fostering growth and maintaining the country’s competitiveness.
The Canadian data centre landscape varies across provinces and territories, and even within municipalities. Despite market growth, challenges may exist due to energy constraints, rising land prices, and competitive real estate markets in key cities.
Despite this, Canada’s lower energy costs, abundant clean and renewable energy resources, and cooler climate may be attractive to foreign businesses looking for opportunities in the country’s healthy, innovative technology ecosystem.
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