An aerial view of a 33 megawatt data center (C) with closed-loop cooling system on April 14, 2026 in Vernon, California. A surge in demand for artificial intelligence (AI) infrastructure is fueling a boom in data centers across the country and around the globe. (Photo by Mario Tama/Getty Images)
As Canada faces a potentially massive increase in electricity demand from artificial intelligence (AI) data centres, questions are emerging over whether power supply can keep pace and who will pay for the infrastructure needed to support the demand.
A single major data centre project under construction in Alberta, for example, could eventually require about 30 percent more electricity than the entire city of Edmonton.
Who pays the costs of that expansion will depend mainly on whether data centre operators are required to pay for the additional generation and grid infrastructure they require, and whether electricity supply can match the demand. The issue is also largely dependent on the jurisdiction and the electricity regulatory frameworks in place.
Looking for Power
The Canada Energy Regulator’s 2026 baseline scenarios forecast that Canada will add 1.5 gigawatts (GW) of data centre electricity load by 2030 and 3.5 GW by 2050, with most growth occurring in Ontario, Alberta, and Quebec. A higher-growth scenario adds 2.7 GW by 2030 and 12 GW by 2050.
The surge in AI data centres also coincides with the recent launch in June of Ottawa’s national AI strategy, which envisions large-scale Canadian AI data centres providing up to 850 megawatts of computing capacity by 2030.
Ontario’s Independent Electricity System Operator, a non-for-profit organization established by the provincial government that manages the province’s power system, predicts that data centres will account for 8.6 percent of Ontario’s total electricity demand in 2050.
The scale of the potential demand is particularly apparent in Alberta, where Meta’s $13 billion AI data centre campus in Sturgeon County, near Edmonton, broke ground in July.
The campus is expected to need a grid connection of approximately 970 megawatts (MW). Meta announced the project as a 1 GW data centre, while Clark Builders, a project delivery partner, reports a capacity of 1.6 GW, perhaps referring to a possible larger buildout.
The Alberta Electric System Operator, the province’s electrical system regulator, noted in June 2025 that 29 proposed developments, mainly data centres, were seeking grid connections amounting to more than 16 GW of total demand, more than the whole province’s peak electricity demand at the time.
Alberta passed legislation in December 2025 establishing what has been described as a “bring your own power” model.
The system encourages data centres to bring their own generation to support their connection to Alberta’s electricity grid, under a “cost-causation” framework for transmission. The province says this means “data centres (not Alberta ratepayers) will pay for any necessary transmission upgrades.”
Other provinces have also released frameworks for data centre development, with Ontario releasing its “Data Centre Playbook” in August 2026, and Saskatchewan releasing its guidelines in the same month.
The federal government announced its framework earlier this month, saying in a Sept. 3 statement that data centre companies should minimize water and electricity use and not shift electricity costs to Canadians.
Wholesale Prices vs. Retail Rates
An Aug. 26 report by the Pembina Institute raised some controversy for its analysis estimating that Meta’s Sturgeon County campus could add between $267 and $462 per year to the electricity bill of an average Alberta household between 2027 and 2031. Meta and the government of Alberta dispute this, saying Pembina’s analysis is flawed.
In its analysis, Pembina said that the higher demand caused by the campus could push wholesale electricity prices higher before new generating capacity is built. Under the rules, data centres are allowed to link up to the electricity grid before their own power sources are operational, something that Pembina electricity program director David Pickup says could temporarily tighten electricity supply and demand conditions, and raise prices.
Alberta’s government disputes Pembina’s conclusion, saying large data centres such as Meta’s will not raise household electricity bills because they will pay their own connection and infrastructure costs. The government says their transmission payments will also help spread fixed grid costs among more users.
The province says Meta will draw about 970 MW from Alberta’s grid, for which Meta will pay nearly $200 million per year in transmission fees, plus its own connection costs.
In addition to the grid supply, the province said private companies will be building a new $4.6 billion natural gas power plant nearby, which will add new generation as the campus grows.
“Not one dollar of that plant, that connection, or those fees is charged to your household,” the Alberta government wrote in a Sept. 2 online statement addressing concerns about data centres and electricity bills.
The statement acknowledges that “when supply gets tight, prices rise,” but it disputes the idea that projects including Meta will tighten supply enough to raise household electricity bills.
Capital Power Corporation announced in July that it has signed a long-term agreement, of more than 10 years, to provide Meta with 250 MW of power in support of the Sturgeon County data centre, beginning in the second half of 2028. Meanwhile, Pembina Pipeline Corp. is developing a 932 MW natural gas plant to also provide power to Meta’s campus.
Meta also disputes Pembina’s conclusion that the centre could raise power bills, with spokesperson Julia Perreira telling The Globe and Mail in August that the analysis is “based on hypotheticals and assumptions.”
“Here’s the truth: Meta pays the full cost of energy upgrades and electricity that our Sturgeon County data centre will use – those costs will not be passed on to Albertans,” Perreira said.
Pembina highlights that earlier this year, Edmonton-based utility company EPCOR said that even under the province’s new model, adding a lot of new demand from data centres would “almost certainly increase electricity prices.”
Depends on the Market
Queen’s University energy policy professor Warren Mabee says customers served by local utilities connecting AI data centres could face higher delivery charges. However, he added that this also depends on which market is being looked at.
“There is definitely a potential for increased bills near AI centres. This is primarily attached to delivery charges by the LDC [local distribution company], as the cost of electricity should remain about the same even under an AI growth pattern,” Mabee said.
“As AI centres get built, local distribution companies need to connect them up, and this can translate into higher costs for ratepayers as the distribution grid is updated.”
However, Mabee said a large customer placing consistent demand on the electrical grid can also help utilities make more efficient use of existing infrastructure and spread fixed costs across the market.
“In the right circumstances, having a large and constant demand centre for energy could act as a buffer which would allow LDCs and transmission companies to better manage customer needs,” he said.
“However, if significant new infrastructure is required (i.e. substations, lines, etc.) which are covered at least in part by ratepayers, then there will likely be a bump in pricing.”
Mabee said the situation could differ in Ontario, where he expects more of the additional generation required for data centres to come from the public side of the electricity system.
In places like Alberta, he says, “a lot of the new data centres are being billed as ‘behind the meter,’ meaning that new generation capacity is being developed by the data company.” However, he says “in places like Ontario, that new power is likely to come from the public side of the meter.”
Pierre-Olivier Pineau, a professor at the Department of Decision Sciences at HEC Montréal, also says who ultimately pays depends largely on how costs to the grid are allocated.
He said data centres “should not impact more those who live nearby, because network and energy costs are usually socialized at the provincial level,” while he also acknowledged that there are exceptions.
“When there are municipal distributors, like in Ontario and Alberta, if new data centers require large distribution network upgrades, there could be cost increase specifically for those under the same local utility,” Pineau told The Epoch Times.
However, he said these cost increases “could be avoided by making new clients pay whatever cost surplus their own consumption is inducing.”