Canada’s AI push hinges on data centres & clean power

Canada stands at a pivotal moment in its AI strategy. 2025 saw a lot of positive momentum and now in 2026, we need to take the next steps in shifting the strategy from theory to application. Success requires urgent action and collaboration from government, private sector and local communities to ensure digital infrastructure is secure, sovereign, and creating local impact.

At Equinix, we see three critical priorities that will advance Canada's AI strategy and benefit Canadians: 

Accelerate data centres as critical national infrastructure (CNI)

Canada's sovereign compute and AI strategies are set to move from theory to practice in 2026. The federal government and provinces such as Ontario, Quebec, Alberta and B.C. are aggressively positioning themselves as prime destinations for AI and data centre development through federal compute strategies, provincial incentives, power policies, and targeted investments.  

Canada's next decade of growth hinges on treating data centres as critical national infrastructure. AI and cloud demand are surging - the IEA projects global data centre electricity use could roughly double by 2026 versus 2022, driven by AI workloads. In Ontario, the Independent Electricity System Operator (IESO) flags large "step‑load" connections like data centres as major new demand through the 2030s, requiring proactive transmission and interconnection planning. This isn't "more data centres or climate progress." It's building the right capacity, in the right places, on clean power - Canada already sources  approximately 84% of electricity from non‑emitting generation.

Recognizing data centres as CNI would align permitting, grid planning and workforce skilling. It is also important to differentiate between the different types of data centres. While data centres enabling AI training currently dominate discussions around Canada's AI strategy, not nearly enough attention is being paid to interconnection and colocation data centres.

Interconnection and colocation data centres form the connectivity backbone enabling seamless cloud access, hybrid IT, financial transactions, healthcare delivery, and business applications that Canadians rely on daily. Without them, Canada's digital services grind to a halt. 

In parallel, we urgently need a plan to ensure resiliency in the data center space that addresses power management, data security and physical security. Despite fragmented provincial standards, Canada lacks a clear and unified national framework.   Just as railways and ports were critical in Canada's development, digital infrastructure needs to be seen as an economic asset. The government needs to take action to ensure the reliability and resilience of this infrastructure, which in turn will drive trust and adoption.

The productivity stakes are high - Bank of Canada leaders call Canada's gap an "emergency". With coordinated large step‑load planning prioritizing the right types of data centres, efficiency and heat‑recovery standards, and faster interconnections, data centres can be a competitive flywheel for jobs, investment and a secure, sustainable digital economy.

Prioritizing adequate electricity for data centres

Canada's AI opportunity depends on two things in tandem: enough clean electricity for data centres and the ability to deliver it where and when it's needed. Generation alone won't solve it - transmission, distribution and interconnection are now gating factors. Globally, transmission projects often take close to a decade, and grid queues are swelling. (See IEA, Electricity 2024 and Grids and secure transitions.)

In the U.S., over 2,600 GW awaited interconnection in 2024 with median waits near five years - signals Canada should heed. Meanwhile, AI designs push 80–150 kW per rack and multi‑hundred‑MW campuses, stressing local substations. (See CBRE NA Data Centre Trends H2 2024.)

Canada's advantage of producing about 84% non‑emitting power can translate into predictable access if we expand clean supply and execute targeted delivery (See Natural Resources Canada facts; Canada Energy Regulator analysis). A balanced plan: scale firm, low‑carbon generation and PPAs; implement a national large step‑load protocol with transparent queues and firm service dates; fast‑track high‑impact substation and transmission upgrades; and standardize heat‑reuse readiness and high‑efficiency cooling.

New approaches to managing energy and water consumption

As data centres become critical infrastructure, smart management of energy and water must mitigate environmental impact while advancing Canada's AI strategy. A national playbook - co‑developed with utilities, municipalities and district‑energy operators - should standardize heat‑reuse readiness, liquid‑cooling readiness, alternative water sourcing and metering. Equinix's TR5 in Markham already exports waste heat via Markham District Energy, proving viability in Canadian climates but industry-wide adoption is needed.

Energy efficiency and heat reuse:

• Liquid cooling and higher inlet temperatures reduce fan energy and improve PUE for high‑density AI. (See ASHRAE TC9.9 thermal guidelines.)
• Make heat‑reuse readiness standard in new builds.

Clean power and grid‑supportive operations:

• Canada is at about 84% non‑emitting electricity, an advantage when paired with PPAs and siting near existing capacity.
• Demand flexibility, workload shifting and UPS‑based grid services help integrate renewables and lower system costs. (See IEA, Electricity 2024 and Grids and secure transitions.)

Water stewardship:

• Match cooling choices to local water risk; track and water usage effectiveness alongside PUE.
• Use alternative sources (reclaimed/industrial water) where feasible; expand metering and reuse.

Canada's AI and Innovation Strategy will only succeed if it provides tangible benefits for people and communities. Canada's AI and infrastructure strategies are explicitly framed around enabling innovators and businesses while safeguarding Canadians' data, services, and quality of life. At the end of the day, AI compute, energy planning, and data centres must support reliable critical services, affordable utilities, job creation, Indigenous and municipal partnerships, and community-level benefits such as heat reuse and digital inclusion.