Recently, the use of artificial intelligence has increased exponentially. It has enmeshed itself in countless ways across our everyday lives. ChatGPT alone is estimated to process around 2.5 billion prompts per day. It is easy to think of AI as purely virtual, existing on the cloud, the internet, and the digital devices of its users. However, AI has a very real, physical footprint, that is quickly becoming more visible.
Data centres are not new; they have existed in different forms for over a decade. Hyperscale AI data centres, however, are magnitudes larger than the small older ones hidden in downtown office buildings. These facilities are used to train and host AI and are now popping up across the United States and Europe despite increasing public pushback.
As data centres come to Canada, it is worth asking why they have received such sustained resistance, what their drawbacks are, and how the government can mitigate them. If Canada is going to join the race towards sovereign AI, it must do so in a way that does not sacrifice the environment or the wellbeing of its people.
Digital Sovereignty and Canadian Data Centres
Over the past year, Canada has committed to joining the race to acquire hyperscale data centres. In early 2026, the federal government announced it was accepting proposals for new AI data centres to be built across the country. Innovation, Science, and Economic Development Canada (ISED) is now reviewing over 160 proposals. The impetus behind the government’s recent push to build these facilities is intimately tied to the concept of digital sovereignty.
According to the Government of Canada, digital sovereignty is defined as the ability of a government to “exercise autonomy over its digital infrastructure, data and intellectual property.”
As an increasing percentage of critical infrastructure, military intelligence, and essential applications are operated online, domestic control over digital operations becomes a matter of national security. Digital sovereignty not only helps safeguard the privacy of a country’s information but also helps bolster national resilience in the face of possible natural disasters or attacks by outside actors.
Data centres contribute to a country’s digital sovereignty as they are the physical infrastructure that stores and manages digital data. Building these sites in Canada means that the data stored in them will be subject to Canadian laws and jurisdiction. The government would be able to more easily ensure the data’s privacy and have access to it in the event of an emergency.
However, while data centres play an important role in digital sovereignty, they are only one component. Who owns and operates them, who provides cloud services, and where key pieces of technology (such as chips) come from are all equally important.
The Hidden Costs of Data Centres
While building hyperscale data centres is a key part of Canada’s path towards digital sovereignty, their downsides should not be obscured. Over the past several months, the behemoth levels of energy and water used in the running of such facilities has repeatedly made the news. A recent United Nations University Institute for Water, Environment and Health (UNU-INWEH) report stated that if data centres were viewed as a country, they would rank 11th globally in relation to electricity usage in 2025. Meta’s Hyperion data centre in Louisiana is expected to consume over twice the amount of power as the entire city of New Orleans. Similarly, Meta’s facility in Wyoming is set to use more power than every home in the entire state put together.
If not properly planned for, this electricity usage can have negative effects on local communities. Ireland, for example, began to rapidly build data centres from 2015 onwards. The facilities’ electricity usage, which was 5% of Ireland’s total in 2015, skyrocketed to 21% in 2023, accounting for more electricity use than all urban households in the country combined. In response to electricity constraints, Ireland was forced to pause any new data centre projects until 2028 while the electrical grid caught up. In the US, which hosts nearly half the world’s data centres, nearby residents have seen their utility bills increase. Many of these increases come from the construction of new infrastructure necessary to support the large power needs of these facilities, the cost of which is distributed across all electrical customers in a given area.
Alongside data centres’ high consumption of power are their high consumption of fresh water. Large facilities can use up to 5 million gallons of water a day, the equivalent of a city of around 50,000 people. Much of their water usage is connected to their cooling systems of the chips inside. One of the simplest (and cheapest) forms of cooling is evaporative room cooling. Around 80% of the water consumed by data centres evaporates. This can cause issues in the general water supply, as evaporative cooling is known to leave behind higher densities of contaminants and salts in the remaining water. The water that is not evaporated is often sent to local wastewater facilities, who are not equipped to handle this volume of water. Failures at wastewater facilities can lead to contaminated water entering the local water system.
Beyond the power and water usage, there has been increasing concern about the noise pollution coming from data centres. This noise is often primarily attributed to cooling systems and backup generators which produce a constant hum. The larger the facility, the larger the cooling system and number of generators, and therefore the greater the noise. Hyperscale facilities using diesel generators can produce noise up to 105 decibels, which is equivalent to a jet plane flying overhead. This can lead to health concerns for residents located nearby including migraines, high blood pressure, and insomnia.
A Necessary Balancing Act
A recent poll of Canadians taken in mid-July showed a high level of concern around these new potential sites. 81% of those polled were worried about increases to their electricity bills, while 79% were concerned about environmental impacts. Less than half of respondents (46%) said the “development of data centres used for supporting AI in Canada is a good thing.” These results show a divide among Canadians on data centres’ role in building Canadian digital sovereignty, and a widespread concern for their effects at the personal and environmental level.
The federal and provincial governments should take these concerns seriously. There is real evidence behind Canadians’ doubts and real need to augment how data centres are built and run. First, more can be done by the companies behind these facilities. It should be a requirement that companies build sound proofing both inside and around the sites. This can include tree planting, which not only muffles sound but would also help offset carbon emissions. Evaporative cooling is deeply wasteful and should be replaced by other systems, such as immersion cooling, which uses drastically less water. Infrastructure upgrades required to supply the sites with water and power must be paid for by the companies themselves, rather than the local inhabitants.
Data centre companies also need to be more transparent. Accurate water and power usage, and impacts on the environment are hard to gauge when the corporations behind these projects refuse to release their data. Full transparency should be a basic requirement for any data centre built in Canada and this transparency should be supported by independent surveys on the water, power, environmental, and community impacts of the proposed project.
Building Canada’s digital sovereignty is important, and it is clear that data centres will play a role in this. However, if these facilities are being sold to Canadians as beneficial, Canada has a duty to make sure they are not causing undo harm to Canadian’s environment, and quality of life.
Image credit: Aerial view of the Google Data Center in Council Bluffs, IA (2017) by Chad Davis via Wikimedia Commons. Licensed under CC A 2.0.
Disclaimer: Any views or opinions expressed in articles are solely those of the authors and do not necessarily represent the views of the NATO Association of Canada.
