The Status Of Data Centre Development In British Columbia And Alberta

On May 5, 2026, Gowling WLG hosted a panel discussion in Calgary examining the evolving landscape of data centre development in British Columbia and Alberta. The panel addressed site selection, development strategies, and capital raising in the Canadian data centre market and brought together representatives from power generators, distributors, utilities, data centre developers, regulators, and members of the Gowling WLG team.

This discussion focused on the intersection of AI adoption, energy generation, Indigenous nation ownership, privacy, Canadian technology sovereignty, and data centre development by exploring how this convergence is unfolding in Canada and the uncertainties arising across the entire Canadian economy. The discussions highlighted not only the technical and policy challenges ahead, but also the incredible opportunities that exist in the sector for entrepreneur-driven provincial economies.

This article draws on observations and themes from the panel discussion which was conducted under the Chatham House Rule. The observations and commentary provided below reflect the authors’ impressions of what were lively and highly informative discussions and should not be interpreted as representing the official views of any of the event participants.

BYOP in Alberta

The discussion underscored the distinct challenges facing developers in each province. In Alberta, data centre development operates within a "bring your own power" framework, as connecting to the provincial grid remains difficult for both structural and regulatory reasons. The Alberta electricity market has not been substantially reformed since its creation in 2002, and while the province's moratorium on renewable energy development has been lifted, uncertainty around future policy direction continues to slow renewable project deployment.

As a result, developers are increasingly taking ownership of their gas supply and pursuing behind-the-meter natural gas power generation to manage project timelines and maintain control over energy costs. The "asset-light" approach, which involves de-risking a site and securing a developer with an end user before significant capital is deployed, was highlighted as a model for mitigating risk and attracting investment in this environment.

Despite Alberta's competitive natural gas pricing relative to traditionally active U.S. markets such as Texas, the province must contend with a carbon price that remains in flux and could erode that cost advantage. Notably, relatively few data centre projects are currently under construction in Alberta.

Shared resources in B.C.

In British Columbia, the challenges are less about energy supply and more about regulatory access. Under the recently enacted Bill 31 and the Energy Statutes Amendment Act, access to electricity for large data centres has shifted from a largely administrative interconnection process to a more strategic allocation and public policy matter.

Where developers could previously assume that BC Hydro would serve load if transmission capacity existed and the economics were viable, large-scale projects must now compete for, and potentially bid on, electricity allocation through a provincial framework, with the prospect of paying a premium for power or being curtailed. BC's single-source dependency on BC Hydro, long power allocation timelines, competition from liquefied natural gas and mining sectors, and policy frameworks that do not treat data centres as strategic infrastructure all compound these difficulties.

One emerging response to these obstacles is an infrastructure-first development model featuring phased deployment and diversified energy sources, including natural gas base load, hydro integration, geothermal, wind, and battery storage, complemented by shared infrastructure platforms designed to support multiple data centre owners.

Across both provinces, access to equipment, particularly turbines, was identified as a significant bottleneck, with wait times for generator sets now stretching to six years and a secondary market emerging for queue positions. Canada has become an increasingly attractive destination for both domestic and international data centre investment, with Asia-Pacific groups seeking to service the U.S. market from Canadian soil.

However, much of the Canadian investment community continues to view data centres as a niche asset class rather than core infrastructure. If domestic capital does not step up, Canada risks ceding long-term ownership of critical digital infrastructure.

Evolving Indigenous ownership models

The discussion also explored the growing interest from Indigenous communities in data centre projects and the importance of meaningful equity participation. There is considerable enthusiasm among First Nations for these infrastructure opportunities, but panelists noted that expectations around returns can sometimes be unrealistic. Meaningful Indigenous equity participation requires clear communication about what partners should expect, both in terms of governance involvement and financial returns.

Indigenous governance structures present unique considerations for long-term infrastructure commitments. Shorter election cycles and limited appetite for debt within many Indigenous communities can make multi-decade project commitments challenging. Developers were encouraged to structure deals that work within these realities, recognizing that community leaders must justify their decisions to members. The differences between developing on First Nation reserve land versus non-reserve land owned by First Nations, including significant regulatory differences, may also lead to different participation models depending on the project location.

Trust and relationship-building were repeatedly cited as essential before financing Indigenous projects. Doing business with Indigenous communities differs from other commercial counterparties in important ways, including approaches to confidentiality, sensitivity to rushed timelines, and the need for education and awareness throughout the partnership process. Corporate partners who fail to appreciate these differences often encounter common pitfalls that could be avoided with proper preparation and patience.

Involving the Crown

From a financing perspective, provincial Crown corporations such as the Alberta Indigenous Opportunities Corporation (AIOC) play an important role in facilitating Indigenous investment and equity ownership in major projects.

One approach involves helping First Nations develop specific cash flow streams within a project, allowing Indigenous communities to participate while managing their risk exposure. However, challenges remain in early-stage, greenfield project development.

Guarantee programs are typically designed as “last mile” tools, meaning a structural “first mile” gap still exists that can make it challenging for Indigenous communities to participate early in a project’s lifecycle. Guarantee programs are generally not designed to absorb early-stage development risk, so meaningful Indigenous investment in the current push for data centre development will often require corporate partner support and creative structuring solutions to help minimize Indigenous investors’ equity risk at the outset.

At Final Investment Decision, the capital stack for Indigenous-involved projects typically incorporates a combination of grants and guaranteed loans alongside conventional financing. Understanding how these elements factor together from an Indigenous financing perspective is critical to structuring deals that enable meaningful community participation.

The road ahead

The discussion concluded with a consensus that the single greatest obstacle to advancing data centre projects in Canada is the lack of a coordinated infrastructure strategy capable of synchronizing power, transmission, fiber, permitting, and capital at the speed demanded by the AI economy.

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