Alberta sets 2% data centre levy to boost AI investment

Alberta is introducing a new levy framework for large-scale data centres, aiming to stimulate investment and ensure benefits for residents as the sector grows rapidly.

The provincial government will implement a two per cent levy on computer hardware at data centres with a connected capacity of 75 megawatts or greater, taking effect from December 31, 2026. The measure is explicitly targeted at grid-connected facilities and follows a six-week consultation period with industry stakeholders.

According to the government, the structure of the levy has been designed to uphold Alberta's competitiveness and secure long-term economic benefits for its citizens. To maintain the province's attractiveness for data centre investors, the levy will be fully offset against provincial corporate income taxes. In other words, once a facility becomes profitable and subject to corporate taxation, there will be no supplementary tax liability for the operator.

"Alberta's government has a duty to ensure Albertans receive a fair deal from data centre investments. This approach strikes a balance that we believe is fair to industry and Albertans, while protecting Alberta's competitive advantage," said Nate Glubish, Alberta's Minister of Technology and Innovation.

The government is considering supplementary measures to provide greater cost predictability for operators. These include a payment in lieu of taxes scheme, enabling data centre companies to make stable, annual payments instead of variable levy amounts, and a deferral program intended to ease cash flow during construction phases and early operating years.

"After working closely with industry, we're introducing a fair, predictable levy that ensures data centres pay their share for the infrastructure and services that support them. This approach provides stability for businesses while generating new revenue to support Alberta's future," said Nate Horner, President of Treasury Board and Minister of Finance.

To create a standardised approach across communities, the provincial government has designated data centres of 75 MW or greater as designated industrial properties. Property values for these facilities will be assessed by the province. Land and buildings associated with data centres remain subject to municipal taxation, with municipalities retaining the option to grant property tax incentives or deferrals for up to 15 years under the Municipal Government Act.

The new levy framework expands upon the Alberta Artificial Intelligence Data Centre Strategy, approved in December 2024. This report sets out Alberta's objectives for attracting AI-focused data centre investment, highlighting strategic factors such as the province's cool climate, access to low-cost electricity, and a competitive tax environment.

Industry analysts anticipate that the global AI data centre market will surpass CAD $820 billion by 2030. The expected increase in AI adoption is likely to more than triple demand for data centre capacity worldwide by that time, with some projections indicating a 160 per cent rise in global data centre energy consumption driven by AI technologies. Data centre capacity across the Americas is expected to double or more in response to low vacancy rates and persistent demand for AI-related computing power.

This new regulatory structure is intended to ensure that Alberta remains a preferred destination for large-scale data centres, balancing both economic opportunity for the province and the operational requirements of major industry players.