By: Rob Breakenridge
It was a trifecta of political victories for Alberta Premier Danielle Smith during the Calgary Stampede.
First, of course, it was the landmark west coast pipeline announcement, made alongside Prime Minister Mark Carney. A second, somewhat more nebulous pipeline announcement followed, this one alongside Ontario Premier Doug Ford.
In between was perhaps the most tangible of all the announcements: Meta’s plan to build a massive new $13-billion data centre in Sturgeon County, just north of Edmonton. Coupled with that was a separate announcement of a $4.6-billion natural gas-fired electricity plant to power this new data centre.
It’s the sort of investment that the premier has been relentlessly pursuing, and undoubtedly makes Alberta the Canadian leader in this field (mind you, it’s not clear who else is actively in this race).
Much to Smith’s chagrin, I’m sure, the response to the announcement — and the prospect of subsequent, similar announcements — has not matched her own level of enthusiasm. That’s forced a pivot, whereby Smith is now both a data centre salesperson and an open-minded, willing-to-listen elected official.
This debate is divisive enough on its own, as we’ve seen in other jurisdictions. For as much as Smith wants to position herself as the champion of this kind of development, by linking herself so closely to the debate, she’s bringing along her own baggage and politicizing it even further.
Her own favouritism and double standards may be tripping up her efforts here, thus undermining the cause of making Alberta Canada’s — or even North America’s — data centre leader.
The Alberta government has now announced a series of town hall meetings, so that members of the public can have a say on this debate. The premier, though, has also shared a lengthy video where she bats down some of the various concerns and criticism around data centre development and touts the many benefits that Alberta’s approach will deliver.
For what it’s worth, I would largely agree with the Alberta government’s approach here. Whatever we think of A.I., or the companies building out this technology and the data centres to support it, none of this is going away anytime soon. If done right — that is, addressing electricity and water usage, as well as concerns over location — there is a lot of upside to attracting these investments.
However, here in Alberta, not all investments and industries are created (politically) equal. We’re seeing first hand how the government red carpet is rolled out for preferred industries as opposed to the hostility and obstacles that confront those industries viewed as undesirable.
The concerns in the data centre debate around rapid growth, a regulatory void, environmental impact, land usage, and aesthetics in many ways echo the recent debate in Alberta around renewable energy.
To be sure, there is no one wind or solar project that would come anywhere close to $13-billion, but all told, it’s still a multi-billion dollar industry that encountered a very different sort of reception from this government.
Ironically enough, it was Alberta’s free-market approach that allowed the province to emerge as a leader in renewable energy. But that was never really a priority or objective of the government, and the perception that renewables were a threat to oil and gas and/or a policy preference of Liberal Ottawa made the industry a political pariah.
It was three years ago last month that Alberta imposed a six-month moratorium on the approval of any new renewable energy projects. The premier initially insisted that the Alberta Electric System Operator (AESO) asked for a pause, but it later emerged that AESO’s CEO had expressed that he was “not comfortable” with the move, worrying that it could send the industry into a “tailspin,” and send a “closed-for-business message.”
When that moratorium was lifted in early 2024, strict new rules were imposed regarding land use and development regulations, including bans on new projects in certain agricultural areas or land with “pristine viewscapes.”
That’s not to say that there isn’t a need for regulations around wind or solar projects. However if the government’s concerns around reliability and land use and protecting the grid were genuine, you’d expect to see such concerns feature more prominently in their approach to data centres.
One estimate from the Business Renewables Centre Canada found that the moratorium impacted 118 projects worth a combined $33 billion — all privately financed projects, by the way. A study last year from the Pembina Institute found that almost half of those paused projects never got off the ground.
None of that ever seemed to really bother the government, even if they will at times boast of Alberta’s renewable sector when it’s convenient in advancing a certain political narrative. Of course, the variety and scale of electricity generation in Alberta is often held up as the sort of advantage we possess in attracting data centres in the first place.
So, depending on the industry, regulatory uncertainty is either an obstacle for the government to remove or a necessity that companies and investors simply need to live with. The premier holds herself and her government up as pre-development and pro-investment, but they’re quite selective in how that principle applies.
There may be some clever and strategic politics at play here. Smith often seems keenly aware of what’s motivating her political base, and they’re clearly not big fans of renewable energy.
Her political radar might be a little off, however, when it comes to data centres. Then again, this may be her government’s own cynical approach coming back to bite them.
The jury’s still out on whether this is good politics, but we’d be better off if they could keep the politics out of the economics.
Rob Breakenridge is a Calgary-based podcaster and writer. He can be found at robbreakenridge.ca and and reached at rob.breakenridge@gmail.com
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She's completely right. Wind farms are totally uneconomic, and it's much more difficult to export electricity than data.
While data centres are overbuilt right now, they aren't going away. With oil and gas exports impeded by excessive regulation, something that can benefit from cheap energy and be exported with optical fibre is just the thing.
If Newfoundland had had data centres, the Churchill Falls electricity discussion would look very different.
Make no mistake the Billions of dollars for these data centres do not end up in Alberta or Canada.
While we may benefit short term from construction there is no residual buy of technology.
There is the inherent risk of closure, and quickly, leaving taxpayers on the hook for a site 75% the size of Airdrie.
Smith can’t or won’t get the current energy industry to clean up after itself why would we expect this to be any different.
Failure and radicalization are the two dominant forces in Smith’s life.