Western Canada Data Center Alliance is an industry alliance focused on supporting the growth of data center and digital infrastructure across Western Canada. It brings together industry and stakeholders to promote economic growth and development, create a forum for dialogue, share insights and advice, and maximize benefit to the region
What gap were you trying to address in founding the Western Canada Data Centre Alliance?
I wanted to bridge a gap in the ecosystem when it comes to data center and data center-adjacent industries, increase communication among stakeholders, share information about the industry and connect some dots. Even just adding a net new gigawatt of data center load in Alberta is essentially a pathway to 10x-ing the industry. Imagine 10x-ing any other industry in such a short period of time. The amount of growth required in job creation, skills, manufacturing, services, etc. And when I say data center-adjacent industries, this is a pretty wide net, as modern digital infrastructure development requires so many moving parts to move in sync.
Globally, hyperscalers have deployed more infrastructure in the past few years than in all of their previous history. In a frontier market, developers and operators have to understand the grid, transmission, gas and renewables infrastructure, communities, contractors, construction and supply chains. These are all experts in their own realms, but need to communicate with each other and with the digital infrastructure industry to a far greater extent. Our goal is to grow the industry in a way that benefits communities as well. We’re a trade group made up of different parts of the data center ecosystem and also do advisory work, having worked with many of the world’s leading end users, power producers, and developers, and with many local communities. I strongly believe that there is an optimal outcome that can be achieved when all sides communicate and engage.
There’s enough common ground across Canada to see digital infrastructure as a massive opportunity. Today, digital infrastructure is very clearly essential infrastructure. It is the backbone of our society and economy; it’s the glue that holds together all the things we rely upon day to day. The next few years are going to be critical in determining whether this really becomes a long-term success story for our region. The way I see it, we have two options.
We either pay for the subscriptions to LLMs, cloud and streaming services, etc. and receive no local investment or benefits as a result, as the data centers that host these processes get built in other communities. Or, we work with our local communities to build well-designed, responsible digital infrastructure that benefits the local economy, creates local jobs and contributes to the community.
Each job inside a data center can create as many as six additional jobs locally – for example, all the servicing, manufacturing, technicians, etc. These facilities require 99% uptime, which means that every layer is supported by a whole ecosystem of companies which have to have local presence.
Countries are competing to attract data center investment and digital infrastructure. What will determine whether Canada remains competitive in that race?
It’s a tremendous opportunity for Canada. Even building a one-gigawatt facility would be a record-setting capital investment because of the chips, the facility and equipment, the investment in generation and transmission, and the labour. Just one such project would be equivalent to some of Canada’s biggest projects in history. One gigawatt can mean tens of billions of dollars.
As demand grows beyond traditional Tier 1 and 2 markets, our region and Canada in general can take specific strides to be competitive, and I believe we have already taken the first steps. We can also learn from other jurisdictions’ experiences. The U.S. has piloted some really interesting programs, including treating data centers as essential or critical infrastructure in policy and regulatory systems. Again, these are complex, high-CapEx facilities built for 25, 30 or 35 years. There are programs in other countries that introduce regulatory “shot clocks” or earmark underitilized federal industrial lands to expedite permitting and approvals. Canada has an opportunity to move quickly while learning from those experiences and what worked and what hasn’t. Between now and 2030 is a huge window of opportunity due to the imbalance between supply and demand and we can get some big wins in that time. Beyond 2030, nuclear power will likely start taking a bigger role in the industry. In many ways, the modern global data center buildout is increasing the speed of innovation and technology adaptation out of necessity.
Just like any other commercial or industrial development, there are optimal places to locate data centers, and there are suboptimal ones. I believe that both industry and communities want to locate these facilities in the optimal areas. Locating these facilities in industrial zones, underutilized areas, and other considerations such as innovating in overall design methodology that integrates the facility better with its surrounding environment. All of that is being done as we speak.
Not every proposed data center project makes it to construction. What separates the projects that move forward from those that don't?
There is a lot of real demand, but it comes with conditions based on speed to market and power availability, connectivity, location, proximity to large markets and other factors. Globally established data center markets are proven hubs with infrastructure, competitors and an existing market, so building there is a relatively easy decision.
Alberta and much of Western Canada are more of a frontier market. We have an opportunity to attract some of the global demand around training and higher-density facilities, and a lot of jurisdictions are competing for those projects. Power is one of the bottlenecks, but it comes with conditions. You need to meet reliability standards and location preferences. Different segments of this industry — co-location, cloud, AI training and inference, crypto — all have different drivers and location preferences. However, they all require cooling, and in Alberta, these facilities can benefit from “free” air cooling for a large portion of the year.
The projects that move forward are the ones that carry out early community engagement, have realistic timelines for regulatory processes, have capital to carry out the initial development stages, and are connected or in conversation with an off-taker. Having strong local partners and experts who understand the power market dynamics and regulatory processes are also key, as this varies by jurisdiction.
Alberta is attracting growing interest from data center developers. What advantages are drawing investment to the province?
Power and a pro-business climate. We had 1.2 gigawatts available on the grid, which was allocated in phase one of the AESO allocation process. We also have a deregulated electricity market, so private entities can build and contract power plants.
The initial available capacity attracts you here, and what keeps you here is the ability to create a new generation and co-locate with it or tether to it, which provides room to grow. Hyperscalers and colocators typically wait for each other to be the first to enter a new market. And it’s unlikely that any of them would enter a new market without seeing a viable path to continue growing beyond the initial investment. The benefit of locating a large load like a data center on a deregulated market is that it gives generators incentive and predictability to build new power, which could benefit the grid in general. If customers sign long-term agreements, generators will build new generation. Alberta’s strategy to attract data centers and its willingness to work with large-scale investments is also attractive. Government is relatively straightforward and pro-business while ensuring there are no negative impacts on ratepayers or communities. The province and regulators have also created rules where, if you operate a data center over a certain capacity and bring new generation to the grid, you’re better off than not doing so.
Data center investment decisions often move quickly. How important are government readiness and speed in attracting projects?
Speed is one of the key pillars, absolutely. With so much rapid progress and demand, everybody’s learning as they go. This level of demand is unprecedented, especially for a frontier market. Across Canada, we probably had less than a gigawatt of total data centers deployed across the country as recently as last year, so building more than a gigawatt in Alberta within a couple of years could leapfrog all of Canada combined. I would also like to make the distinction between proposed projects and confirmed projects. There is a lot of noise out there, and one of the things that the WCDCA does is help folks filter that noise.
Speed is very important. Even if you have the right location, power, land and community support, permitting or regulatory delays of several years can still make projects a no-go because some of these facilities want to be built and operational within 18 months and definitely before two years. In a frontier market, companies are more selective because they want everything lined up before making the first investment. If somebody is exploring a $10-50 billion investment, it’s usually because they see a pathway to additional future investments as well.
What do people most often misunderstand about the data center industry?
There’s a lot of outdated information out there about the space, especially around water usage. In the 1990s, many facilities used significant amounts of water for evaporative cooling, because the facilities were smaller, and evaporative cooling was proven, cheap and available tech.
As rack densities increased, the industry shifted toward direct-to-chip liquid cooling and closed-loop cooling systems that don’t use any water on a daily basis because of the level of heat rejection required. Today, there are many facilities of all sizes using only two to three houses’ worth of water annually. Companies and communities are increasingly aligned around reducing water use, and many major players are designing facilities around that principle. Many major data center campus builds include significant investment from the operator into local infrastructure, including water, roads, power, fibre, etc., which brings economies of scale for the rest of the ecosystem. Many hyperscalers have made strong commitments in various regions of the world to reduce water use significantly across the board.
I think there is a definite difference between communities that are against any sort of development at all, vs communities that have reasonable and justified curiosity about a project that is proposed in their region. I think the latter is actually the majority, and companies that are successful understand this.
The data center industry started out many decades ago and has been successfully operating somewhat under the radar for many years. As these facilities are critical infrastructure and handle sensitive data, there hasn’t been, historically, a huge reason to advertise their locations and processes. Now that the sector and demand are growing, industry leaders are absolutely getting better at communicating about what goes on inside the facilities, the employment creation associated with them, and making commitments to responsibly develop and operate these projects.
If you take a walk in any major metro center, you’ll be walking by several data center and interconnection facilities, quietly providing the background for all of our internet, financial transactions, etc., and you likely won’t have known it’s there and has been there for decades.
Beyond building facilities, what will determine whether Canada captures the full economic benefits of data center growth?
We’ve done presentations and events with polytechnics and high schools discussing the kinds of jobs data centers create. We’re essentially in a spot where we are trying to build a whole new supporting ecosystem; a lot of those jobs don’t even currently exist here, but they can be created and trained locally through training, manufacturing and supply chains. Universities and polytechnics will have to create all-new programs just to keep up with the demand in this sector – how cool is that? These are well-paid, highly-skilled jobs, and whether Canada takes advantage of that opportunity is a choice that can help with diversification efforts.
Success would mean having shovels in the ground and projects being energized within two years. It would mean seeing local spin-off industries develop around the data center sector. The supporting ecosystem doesn’t exist yet, so you need more local manufacturing, servicing and employees. You get tens to hundreds of local operation jobs, thousands of construction jobs, and then 3.5-6 local indirect jobs created. Not to mention the supply chain opportunities for companies in cooling, power, electrical and mechanical, etc. Success means seeing facilities built while local communities also see meaningful economic benefits. I think our region has the unique opportunity to carry out development in the right and responsible way, while realizing economic gains. It would be a missed opportunity for a region that has so many of the ingredients if we don’t leverage this trend of record-setting global capex.
