Canada’s AI Compute Push and the Power Question

Ottawa has committed about C$2.9 billion to AI compute. Alberta, Quebec and Ontario are deciding who gets the electricity to run it.

Key takeaways

Ottawa committed C$2 billion in Budget 2024 and C$925.6 million in Budget 2025 to AI compute, about C$2.9 billion in total.
About 19,565 MW of new data centre load was requested in Alberta as of July 30, 2026, about 1.5 times its record peak demand.
Hydro-Québec proposed a large data centre rate of about 13 cents per kWh, to take effect November 1, 2026, subject to Régie approval.

Ottawa has committed close to C$3 billion across two budgets to build AI computing capacity in Canada. The harder constraint is electricity. Alberta has received requests for more data centre load than its entire record peak demand, and Quebec and Ontario have both moved to control who gets connected and at what price.

The federal money

Budget 2024 set aside C$2 billion over five years, starting in 2024-25, for the Canadian Sovereign AI Compute Strategy. Innovation, Science and Economic Development Canada (ISED) breaks it into three parts:

Component	Amount	Purpose
AI Compute Challenge	Up to C$700 million	Private sector and academic-industry projects to build commercial AI data centre capacity
Public supercomputing infrastructure	Up to C$1 billion	Includes the AI Sovereign Compute Infrastructure Program, with up to C$200 million near term to expand existing public compute
AI Compute Access Fund	Up to C$300 million	Helps Canadian companies buy AI compute

Budget 2025 added C$925.6 million over five years, starting in 2025-26, for sovereign, large-scale public AI computing infrastructure. In January 2026, the government opened a call for proposals for large-scale sovereign AI data centres. The intake ran January 15 to February 15, 2026, and projects had to exceed 100 megawatts. Evaluation criteria included sovereignty and data residency, Indigenous participation, energy and environmental factors, and readiness, including utility agreements.

Projects on the public record

TELUS, British Columbia. On May 11, 2026, ISED announced it was advancing work with TELUS on a proposed large-scale AI data centre project in British Columbia under a non-binding memorandum of understanding. The release stated that no funding had yet been committed or distributed. Global News reported the project involves an expanded facility in Kamloops, a new facility in Vancouver’s Mount Pleasant area and a downtown Vancouver facility expected online in 2029.
Meta, Sturgeon County, Alberta. On July 8, 2026, Meta announced groundbreaking on its first Canadian data centre: a 1 GW, AI-optimized campus in Sturgeon County, with investment of more than C$13 billion. Meta said it is fully funding new generation and grid infrastructure for the site. The Alberta government describes the project as pairing grid approval with a $4.6 billion generating station developed by private companies.

Alberta: more requests than the grid has ever carried

Alberta has positioned itself as the province most open to large data centres, and its numbers show the result. According to the Government of Alberta:

The Alberta Electric System Operator (AESO) set an interim limit of 1,200 MW of large load to connect in Phase 1. That allocation is fully taken.
About 19,565 MW of new data centre load had been requested as of July 30, 2026.
Alberta’s record peak demand in a single hour is about 12,800 MW.
A Data Centre Regulation, in force since June 2026, puts projects that bring their own new generation or storage at the front of the connection line.
The province says homes and families take priority over large data centres during supply shortages, and connection agreements are expected to include interruptibility.

Quebec: approvals and a new rate

Quebec has moved to control how its hydroelectric power is allocated. Bill 69, adopted in June 2025, tightened government control over electricity allocation. Under the rules summarized by law firm BLG in July 2026:

Data centres consuming 5 MW or more need ministerial authorization.
Hydro-Québec assesses applications on benefits per megawatt consumed, not first come, first served.
In February 2026, Hydro-Québec proposed a new rate for large data centres of about 13 cents per kWh, roughly double current rates, to take effect November 1, 2026, subject to approval by the Régie de l’énergie. Hearings are scheduled for fall 2026.

Ontario: data centres pay their own way

Ontario passed the Protect Ontario by Securing Affordable Energy for Generations Act, 2025 (Bill 40) in December 2025. It lets the province set eligibility rules for large load facilities and gives the Minister of Energy and Mines power over connection requests. On August 13, 2026, the province released a draft Data Centre Playbook, with consultation closing September 12, 2026. Its stated principle, as summarized by Torys, is that data centres pay the full cost of their electricity, including needed generation and transmission upgrades.

The Independent Electricity System Operator’s March 2026 Annual Planning Outlook projects Ontario demand growing 65% from 2026 to 2050, to 250 TWh, in its reference case. It cites interest from AI data centres as one driver, and sees 8.5 TWh of incremental energy needs emerging by 2032.

By the numbers

Alberta queue vs. peak: 19,565 MW requested / 12,800 MW record peak = about 1.5 times the province’s highest-ever hourly demand.
Alberta’s first tranche: the 1,200 MW Phase 1 limit is about 6% of the requested load.
One campus: Meta’s 1 GW site running every hour of the year would use 8.76 TWh. That is slightly more than the 8.5 TWh of incremental energy need the IESO sees emerging in all of Ontario by 2032.
Federal commitment: C$2 billion (Budget 2024) plus C$925.6 million (Budget 2025) = about C$2.9 billion, spread over roughly five years each.

The comparison shows why every province now links data centre approvals to power supply. A single hyperscale campus is the size of a provincial planning gap.

What to watch

ISED announcements of further MOUs or funding decisions from the January to February 2026 call for proposals.
AESO decisions on connections beyond the 1,200 MW Phase 1 limit.
The Régie de l’énergie ruling on Hydro-Québec’s proposed data centre rate.
Ontario’s final Data Centre Playbook and the draft regulation under Bill 40.
Construction and power supply milestones at Meta’s Sturgeon County campus.
The federal budget and any update to the Sovereign AI Compute Strategy.

Sources

Frequently asked questions

How much is Canada spending on AI compute?

Budget 2024 set aside C$2 billion over five years for the Canadian Sovereign AI Compute Strategy, split into an AI Compute Challenge of up to C$700 million, public supercomputing of up to C$1 billion and an AI Compute Access Fund of up to C$300 million. Budget 2025 added C$925.6 million over five years, for about C$2.9 billion in total.

Why is power a constraint for data centres in Alberta?

The Alberta Electric System Operator set an interim limit of 1,200 MW of large load in Phase 1, and that allocation is fully taken. About 19,565 MW of new data centre load had been requested as of July 30, 2026, against a record hourly peak demand of about 12,800 MW. A regulation in force since June 2026 prioritizes projects bringing their own generation.

What are Quebec’s rules for data centres?

Under Bill 69, adopted in June 2025, data centres consuming 5 MW or more in Quebec need ministerial authorization, and Hydro-Québec assesses applications on benefits per megawatt consumed rather than first come, first served. In February 2026 Hydro-Québec proposed a large data centre rate of about 13 cents per kWh, roughly double current rates, subject to Régie de l’énergie approval.