Rising AI demand puts data centres in Canada’s energy spotlight

As Canada works to strengthen its data sovereignty, Marc Mondesir, Managing Director for Canada at Equinix, says the country must recognise data centres as critical infrastructure.

While telecommunications, transport, and energy are recognised as essential to national security and the economy, Mondesir notes the same designation has yet to be applied to the physical backbone of the internet itself.

He said standards should be set within the space, addressing management, physical security, and power allocation - especially with sata centres run hot and require electricity.

Mondesir is seeking Canadian standards to allocate power based on data centre type, as the distinctions between hyperscaler, AI clusters, and co-location data centres are critical to how Canada should invest and plan for its digital future.

Not all DCs are created equal

"Not all data centre types are created equal and serve the same purpose," he explained. "Hyperscaler data centres exist to create clouds - platforms as a service, infrastructure as a service, and software as a service. AI cluster data centres exist to train models."

Mondesir stated that while hyperscalers are middle of the pack in terms of power consumption, AI cluster data centres rank at the high end. 

While the hyperscaler and AI cluster facilities dominate headlines, Mondesir believes co-location data centres offer the most significant long-term economic value for Canada. 

"It would behoove our governments to think in terms of a portfolio," he said. "Certain portions allocated to hyperscalers, certain portions to AI clusters - but there needs to be a reservation made for the flavour of data centres that allow businesses and customers to connect to clouds and AI."

Last month, British Columbia announced industrial electricity rules that would prioritise natural resource and manufacturing projects over data centres and AI-related power consumption. The Energy Statutes Amendment Act will force these companies to bid on electricity through a competitive process. The act, also known as Bill 31, aims to prioritise the province's development of mining and ports, while also permanently banning new cryptocurrency connections.

"The allocation framework allows for the paced growth of these sectors and avoids mistakes we've seen in other jurisdictions where growth has outpaced infrastructure, resulting in higher costs for everyday residential customers," said BC's Minister of Energy and Climate Solutions Adrian Dix, to the media.

Last year, Ontario's Independent Electricity System Operator reported that electricity demand in the province is expected to grow by 75 per cent by 2050, largely due to the support of data centres for AI infrastructure.

OpenAI's artificial intelligence "democracy"

Chris Lehane, Chief Global Affairs Officer at OpenAI, told Canadians at Elevate Festival that, from an American perspective, OpenAI believes it will need around a gigawatt of energy each week to power its operations. 

Lehane noted that if democracies want democratic AI, they have to compete on advanced power systems like those in the People's Republic of China (which has added 450 GW of wind and solar energy production).

Lehane referenced his boss, OpenAI CEO Sam Altman, citing that as AI systems become cheaper, the cost of intelligence will nearly equate to the cost of electricity.

He did not provide Canadian-specific models, although, from a global democratic perspective, he emphasised the importance of critical data centre infrastructure as the driving force behind AI acceleration.

"The optimist in me says this will modernize our energy systems," said Lehane. "There is not the challenge of a lack of energy, it is how quickly can you identify that energy and bring it on the grid."

Striking the iron while it's hot

When asked whether Canada lags behind other nations on digital sovereignty, Mondesir rejected the idea that the country is "behind," but acknowledged the urgency of acting strategically.

"This is a market that was born yesterday," he said. "It wasn't that long ago that OpenAI launched ChatGPT. Canada has an opportunity to learn from others and take a more balanced approach - balancing innovation with policy." 

Equinix has invested heavily in Canada since acquiring Bell Canada's data centre assets in 2019, spending about $1 billion on the acquisition.

For Mondesir, those investments (and the conversations happening now in Ottawa) are about ensuring Canada captures its share of the emerging global AI economy, which he notes could represent a $7 trillion GDP opportunity worldwide.

"We don't need to go guardrail to guardrail, but at the very least, we start setting standards within this space," said Mondesir. "Part of it is: electricity needs to be prioritized in this space, certainly...we want to ensure that our investments are made in the right categories of data centres but at the right standards."