Canada has announced a national framework for responsible data centre development, setting expectations for projects on electricity costs, water use, local benefits, transparency and strategic value.
The framework was unveiled by Evan Solomon, Minister of Artificial Intelligence and Digital Innovation and Minister responsible for the Federal Economic Development Agency for Southern Ontario, alongside Tim Tierney, President of the Federation of Canadian Municipalities.
The move comes as Canada seeks to expand domestic computing, cloud and data storage infrastructure linked to artificial intelligence and other digital services. Federal officials say the country still relies heavily on infrastructure and services based abroad for the systems that underpin AI.
Under the new principles, data centre projects are expected to create lasting local benefits, avoid shifting electricity costs to consumers, minimise water use and other environmental effects, disclose local impacts, and demonstrate strategic value to Canada.
Officials described the framework as a common national baseline, not a replacement for provincial, territorial, municipal or Indigenous approval processes. Decisions on whether projects proceed will remain local, with regional rules and community priorities continuing to shape outcomes.
The principles have support from a broad group of companies across the data centre, cloud, AI and wider technology sectors. Signatories include Amazon Web Services, Anthropic, Bell Canada, Cohere, Cologix, Equinix, Google, Meta, Microsoft, OpenAI, OVHcloud, TELUS and ThinkOn, along with a range of data centre developers and infrastructure groups.
That list also includes Beacon Data Centres, BUZZ High Performance Computing, Denvr Dataworks, eStruxture, Hypertec Group, Micrologic, Prologis, QScale, Sovereign Digital Infrastructure and Urbacon Data Centre Solutions.
Local pressures
The announcement reflects a growing debate over the local impact of large data centre developments, especially as demand for AI systems rises. Such facilities can require substantial electricity connections and water resources, putting pressure on municipal planning systems and utility networks.
The framework is intended to give communities more clarity when considering major projects. It also aims to encourage a more consistent approach across the country as municipalities are asked to assess increasingly complex proposals.
Canada has framed data centres as critical infrastructure supporting health care, financial services, scientific research and secure government systems, as well as routine services such as online banking and cloud computing. Ministers argue that building more of this infrastructure domestically would increase resilience and expand options for Canadian researchers, businesses and innovators.
The policy also sits within the government's wider AI agenda, which includes support for sovereign AI infrastructure. In practical terms, that means increasing domestic compute capacity so research, development and deployment can take place in Canada rather than relying on facilities and services elsewhere.
A key issue in the framework is who bears the cost of infrastructure expansion. By stating that projects must not shift electricity costs to Canadians, the principles aim to address concerns that major new industrial loads could raise bills for households and other users if grid upgrades are socialised.
Water use is another focus. Depending on design and location, data centres can consume large amounts of water for cooling, and scrutiny of that demand has intensified in several jurisdictions as AI workloads expand. The federal principles say projects must minimise water use and environmental impacts, though the framework does not set numerical limits.
Industry backing
The participation of large cloud and AI groups gives the framework broader weight, although it remains a principles-based approach rather than a statutory regime. The inclusion of developers, operators and technology companies suggests an effort to align expectations across the wider supply chain behind new facilities.
For municipalities, the practical value may depend on how the principles are used in project reviews and negotiations with developers. The Federation of Canadian Municipalities has argued that local leaders need fuller information to judge the effect of individual schemes because impacts vary widely by site, scale and local infrastructure.
Solomon set out the government's position in a statement accompanying the announcement.
"Canada is building the digital infrastructure we need to lead in the age of AI, grow our economy and strengthen our sovereignty. But how we build matters. Data centres must protect ratepayers, respect water and energy resources, and create lasting benefits for the communities that host them. These principles set a clear national standard: If you build in Canada, you must build responsibly and transparently and you must build for Canadians," said Evan Solomon, Minister of Artificial Intelligence and Digital Innovation and Minister responsible for the Federal Economic Development Agency for Southern Ontario.
Tierney said municipalities are confronting increasingly difficult decisions as proposals multiply.
"As demand for AI grows, municipalities are increasingly being asked to review complex data centre proposals that will have significant impacts on local communities. Today's announcement is an important first step in helping municipalities better understand and assess projects being proposed in their regions. No two data centre projects are alike, nor will they have the same impact. Municipal leaders need clear and complete information to make informed decisions. FCM welcomes today's commitment by industry leaders to work closely with local governments, mitigate local impacts and ensure local benefits. We look forward to continuing to work with the federal government and industry to improve transparency, strengthen accountability and provide municipalities with the resources they need to protect local interests," said Tim Tierney, President of the Federation of Canadian Municipalities.