Saskatoon wants in on Canada’s rush to build AI data centres

Saskatoon wants in on Canada’s rush to build AI data centres — but would price be worth it?

Hugely expensive project would likely result in very few full-time jobs, a critic says

An AI data centre can cost more than $1 billion to build, and draw as much electricity as a small city every hour of the day.

The companies behind the projects believe Canada has no choice but to follow the growing trend. However, critics say, the centres might not employ as many people as projected by developers while straining water lines and power grids around the site.

There are currently only five hyperscale data centres in Canada, with another 96 facilities either proposed or under construction, according to a recent York University study.

If every one of them is completed, roughly 90 per cent of Canada’s data centres would sit in Alberta, drawn there by its deregulated power market, cheap natural gas, and a government fast-tracking approvals, according to previous reporting by CBC.

In Saskatchewan, Bell Canada is building a $1.7-billion, 300-megawatt centre near Regina in the RM of Sherwood.

Saskatoon also wants in, and the Greater Saskatoon Chamber of Commerce is making the case.

CEO Jason Aebig says the chamber has been working to position Saskatoon as a major data centre hub in the province — pointing in a March news release to the Bell project as the model to follow.

“Data centres, I think, now are widely considered to be critical infrastructure like roads or power grids,” Aebig told CBC's Saskatoon Morning, adding the data centres have less to do with the jobs running them and more with what they make possible.

“I think data centre technology capacity is largely viewed as essential," he said. "It has everything to do with sovereignty. Frankly, the more that our companies, large and small, have to rely on U.S.-based cloud services, that carries real risk.”

Prime Minister Mark Carney unveiled the national AI strategy on June 4, using the same word — sovereignty — saying that Canada is exposed to foreign clouds and infrastructure. He pledged more than $2 billion to expand the country’s AI capacity, and set a goal of up to 250,000 new AI-related jobs over five years.

Bell Canada says the Regina project — which it calls the country’s largest, purpose-built AI data centre — will generate up to $12 billion in economic value for the province, with its construction supporting roughly 800 trades and engineering jobs.

Once it’s running, Bell Canada says, the facility will employ a minimum of 80 people full time.

Bell Canada to begin construction on Canada's largest AI data centre near Regina this spring

CBC News has previously reported that the RM of Sherwood's council that signed off on the rezoning was made up mostly of members appointed by the province, and that the public hearing clearing the way took less than an hour.

In April, CBC reported nearly 200 people rallied outside the Saskatchewan legislature against the project.

Mairin Loewen, an associate program director with the Urban Climate Leadership and a former Saskatoon city councillor, says billions of dollars are being invested in the construction phase but she’s worried about what might follow.

“The devil is in the details,” Loewen told CBC’s Saskatoon Morning. “When data centres are operational, their employment potential is quite variable.”

She mentioned the data centre that recently broke ground in Fox Creek, Alta. Once it’s running, she said, it will employ about 30 people.

“That’s maybe about the same number of full-time positions as a new chain restaurant — you know, an Earls or a Cactus Club,” she said.

The trend, she added, is moving the wrong way: “A lot of the AI-related automation of data centres is reducing their long-term job prospects.”

The other half of the worry, Loewen says , is what these buildings consume.

“It’s like stacking towers and towers of laptops,” she said. “They get hot, so you have to cool those facilities. You can do that using energy, or you can do that using water.”

In drought-stricken parts of the U.S., water-based cooling has become a flashpoint, Loewen said.

Canadian projects increasingly use closed-loop systems that require far less water but more energy, she said, and on the gas- and coal-heavy grids in Saskatchewan and Alberta that’s not a clean trade.

Loewen says it’s still not clear who would pay for the new water main and natural gas pipeline the Regina project needs — the company or taxpayers.

“Protecting the public interest financially, I think, is important,” she said.

What's behind the growing backlash toward AI data centres?

There is opposition against the centres across the country:

Aebig says Saskatoon’s AI reality might look a little different.

“We have to be very realistic about all of the variables and considerations that go into that type of decision,” he said.

“At the absolute top of the list, of course, is power reliability and the capacity of the grid to support either a traditional data centre, I think, and that's what we're talking about for Saskatoon, versus some of the hyperscale ones.

“Community benefit agreements should be a condition of public support,” Aebig said. “You can’t have a high-risk project that literally drains those resources for the benefit of everybody else.

“This is a global capital race. We either need to position ourselves as being a solid and smart destination for this kind of investment or we risk being left behind.”

Loewen urged the opposite tack — slowing the process down.

Before the city lobbies for anything, she says, it should settle its rules for land use, water and energy, and identify who is responsible for the data centre's clean-up when it reaches the end of its life.

“It’s not impossible to build a data centre that is sustainable and responsible,” Loewen said. “We’re not seeing a lot of those because we don’t have regulations that require them.”

With files from Sarah Petz, Alexander Quon and Colleen Silverthorn.

Aishwarya Dudha is a reporter for CBC Saskatchewan based in Saskatoon. She specializes in immigration, justice and cultural issues and elevating voices of vulnerable people. She has previously worked for CBC News Network and Global News. You can email her at aishwarya.dudha@cbc.ca