RC122 JanFeb 2026 - Magazine - Page 32
LEGAL
This cold climate, together with hydroelectric and nuclear
capacity and Canada’s endowment of critical minerals
required to build AI infrastructure, gives Canada strong
prospects for AI-related investment.
THE BLIND SPOTS IN CANADA’S STRATEGY
Canada was the 昀椀rst G7 country to launch a national AI
strategy in 2017: the Pan-Canadian Arti昀椀cial Intelligence
Strategy. The strategy aims to position Canada as a global
AI leader by fostering research excellence, developing
talent, and promoting commercialization. However, it
focuses heavily on intellectual leadership and policy
principles, with limited measures to address the physical
requirements of large-scale AI deployment, including
cades of approvals before construction begins. This maze
of federal-provincial rules introduces uncertainty and cost
escalation, especially problematic for high-capital, rapidly
evolving sectors such as AI infrastructure.
In Québec, two strategic challenges stand out. First,
the province has long reserved large blocks of electricity
capacity for traditional energy-intensive industries, especially metallurgical and mining operations, while deprioritizing data centres. Hydro-Québec explicitly stated in
2022 that it “is in no way working to attract data centers,”
re昀氀ecting hesitancy to dedicate scarce energy resources to
sectors perceived as o昀昀ering limited employment or local
value creation. This cautious approach has left numerous
projects, including major initiatives by Google in Beauharnois, waiting years for approval or grid connection. The provincial stance
prioritizes long-term industrial diversi昀椀cation and resource-based manufacturing over
rapid digital infrastructure expansion.
Second, Québec’s Action Plan 2035 emphasizes wind and solar as complements
to hydroelectricity, but their intermittency
challenges the continuous power required by
AI data centres. While this policy aligns with
decarbonization goals, it may make Québec
less attractive to hyperscale data centre operators, many
of whom now favour regions with stable nuclear or natural gas baseload generation, such as Ontario or certain
U.S. states.
Taken together, these challenges reveal a structural gap
between Canada’s ambition to lead in AI and its capacity
to provide the physical and regulatory foundations needed to sustain it. A recent partnership between the U.S.
government, Westinghouse Electric Company, Brook昀椀eld
Asset Management, and Cameco Corporation to deploy
at least US$80 billion in new nuclear capacity—explicitly
linked to AI data centres and compute—shows the global
race to build AI’s physical backbone is already underway.
“With abundant clean energy, critical minerals, and a strong
technological ecosystem, Canada holds the ingredients to
become a champion of sustainable AI infrastructure.”
data centre capacity, digital infrastructure, and energy
integration.
Building on this framework, the federal government
announced the AI Strategy Task Force on September 26,
2025. The initiative will address safe AI, public trust, and
infrastructure. The task force, comprising experts from
academia, industry, and civil society, will provide recommendations. Nonetheless, details on speci昀椀c measures
remain limited.
A major structural challenge is weak coordination
among federal, provincial, and local authorities, as well
as with Indigenous and community stakeholders. While
the federal government sets broad ambitions for AI, the
energy transition, and digital sovereignty, implementation depends on provincial jurisdiction over energy, land
use, and industrial planning. This fragmented governance
results in inconsistent priorities and delays. The Wonder
Valley data centre in northern Alberta, announced as a
US$70 billion initiative to build one of the world’s largest
AI computing hubs, illustrates these tensions. Despite
support from the provincial government, the project faced
strong opposition from the Sturgeon Lake Cree Nation,
citing inadequate early consultation and environmental
and treaty-rights concerns. The controversy re昀氀ects a
broader issue of social acceptability, a recurring barrier to
large-scale industrial and digital infrastructure projects
across Canada.
Overlapping regulations and permitting delays signi昀椀cantly hamper Canada’s ability to develop large-scale
infrastructure. The Business Council of Canada describes
the permitting system for major projects as “overly
complex, time-consuming and a major impediment to
attracting investment,” noting that projects may face de-
32—RENEW CANADA – JANUARY/FEBRUARY 2026
The right ingredients
The emergence of arti昀椀cial intelligence marks a profound
transformation in the global economy, one that is as material and infrastructural as it is digital and cognitive. Data
centers, energy systems, and supply chains for critical
minerals have become the true arteries of the AI age. As
such, the countries that succeed in this new era will not
be those that simply pioneer algorithms, but those that
can secure, scale, and sustain the physical foundations of
intelligence itself.
For Canada, the path forward hinges on bridging the
gap between its research excellence and its industrial capabilities. With abundant clean energy, critical minerals,
and a strong technological ecosystem, Canada holds the
ingredients to become a champion of sustainable AI infrastructure. Yet, without a coherent, long-term coordination
between federal and provincial levels and a streamlined
regulatory environment, it risks remaining on the periphery of the next technological revolution.
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