Feds seek applications for sovereign data centres over 100MW
The federal government has launched a national intake process to support the development of sovereign, large-scale AI data centres.
The move comes as pressure mounts on Canada's computing infrastructure amid accelerating adoption of artificial intelligence.
Innovation, Science and Economic Development Canada (ISED) confirmed that proposals will be accepted from January 15 to February 15, 2026. The initiative targets projects capable of delivering more than 100 megawatts of planned compute capacity and is intended to expand domestic access to high-performance AI infrastructure.
The process forms part of the government's broader artificial intelligence strategy outlined in Budget 2025, which positioned digital infrastructure as a foundation for long-term economic growth. Demand for computing power has increased sharply as AI systems are increasingly embedded across sectors, including research, manufacturing, health care, and public services.
According to the Independent Electricity System Operator, electricity demand in Ontario alone is anticipated to grow 75 per cent by 2050.
Rather than offering direct funding commitments, ISED will engage with selected proponents through a memoranda of understanding. These agreements are intended to identify promising projects and explore mechanisms that could support development, including coordination with federal financing and infrastructure agencies.
The department said the process builds on recently established federal tools designed to support data centre construction and major infrastructure investment.
"This initiative aims to strengthen Canada's AI sovereignty, drive economic growth, support Indigenous participation, and maximize the use of Canadian partners and supply chains," said Minister of AI and Digital Innovation Evan Solomon in a LinkedIn Post on Tuesday.
Projects must demonstrate how they will ensure Canadian control over infrastructure, operations and governance, reflecting growing concern over reliance on foreign-owned compute capacity for advanced research and industrial workloads.
The criteria place strong emphasis on Indigenous participation and environmental considerations.
Preference will be given to projects that include Indigenous equity ownership or formal partnerships, aligning with broader federal objectives around economic inclusion in large infrastructure developments.
Environmental impact is also a key assessment factor, particularly given the energy demands of hyperscale data centres. Proponents must detail energy sourcing, efficiency measures and strategies to minimise environmental footprint.
The government said it is seeking commercially viable projects with credible timelines, reflecting concerns that global demand for AI data centres is outpacing construction capacity.
"Our government is taking bold steps to secure Canada's AI future by building the infrastructure to support innovation at home," added Solomon in his post.
Federal partners include Invest in Canada, the Canada Development Investment Corporation, the Canada Infrastructure Bank, Export Development Canada, and the Major Projects Office, as well as possible engagement with provincial and municipal government departments.
To improve efficiency, ISED said it will use artificial intelligence tools to summarise proposals during the review process, though final assessments will remain subject to government oversight.