- What Investors increasing are turning to the Canadian data sector
- Why Microsoft, Amazon Web Services and other big players are planning sites across the country
- What next The value of Canada’s data centre market is expected to top US$9bn by 2029, according to industry projections
With technology companies becoming increasing ravenous for data centre capacity, investor interest in the sector is gaining momentum.
According to Toronto-based commercial brokerage Encor Advisors, the sector is expected to be worth US$9bn by 2029, compared with its estimated worth today of US$754m. Market participants say that unmet demand in the U.S. is driving users north as they seek the necessary power to house cloud storage and AI generation facilities.
“The Canadian data centre market is riding a wave of exponential growth, propelled by the relentless surge in cloud services, the insatiable appetite for data storage, and the onslaught of technological advancements reshaping the digital domain,” Encor said in a recent report.
Vantage Data Centers has a “commanding” market share of 22.7%, according to Encor, but Cologix, Digital Realty Trust, eStruxture Data Centers, Equinix, and Urbacon Data Centre Solutions are also prominent data centre as operators and providers in in Canada.
The rapidly rising demand for data centre capacity has made the sector “catnip for investors,” experts say. That manifests as everything from developers looking to build new facilities to increased interest from major players looking to buy data centres that have long-term commitments.
“Data centres are a great place for investors to put their money,” CBRE Montreal broker David Cervantes told Green Street News. “There’s a lot of dynamics there, from yield and cost of development to the future value of the asset.”
Power dynamics
Over the last decade, Quebec has been a major node for data centres, with providers drawn to surplus hydroelectric power and readily available land.
The biggest tech player in Canadian data centres, Microsoft, recently broke ground on a campus in the Quebec City suburb of L’Ancienne-Lorette that’s expected to open in 2026. The company, which established its first data centre in the province eight years ago, plans to build three additional data centres there.
“The company invested US$500m to expand its hyperscale cloud computing and AI infrastructure in the province over the next two years, increasing the size of Microsoft’s local cloud infrastructure footprint by 750% across Canada,” a Microsoft spokesperson told Green Street News.
However, as power use has become a concern for the province amid supply constraints and an electricity export deal between Hydro-Québec and the state of New York, the landscape is changing.
“Anyone with wholesale needs, like one to 20 megawatts, if you need that amount of power, Quebec is no longer a reliable geographic location,” a broker told Green Street News.
The net-winner from Quebec’s looming power crunch appears to be the GTA. Microsoft plans to build two data centres in Toronto. It presented design plans for a site in Markham on Commerce Valley Drive to the city’s planning committee in August.
Google already has established data centres in the region, as have Compass and Equinix. Toronto-based private investor Fengate Asset Management was part of the largest data centre deal of the year when it acquired a controlling interest in eStruxture in a deal worth $1.8bn.
“Toronto’s booming. The major data centre players are all live and driving activity,” a local broker told Green Street News.
Outside of the GTA, data centre space has opened up in the Waterloo region, the country’s largest tech and innovation hub.
Earlier this year, OVHcloud, the French data centre giant, announced the opening of its second Canadian facility (after Montreal) in Cambridge. The Cambridge data centre has 2 megawatts of available power for lease.
Last year, the 40,000 sq ft Columbia Data Vault opened at the site of a former Blackberry facility at 176 Columbia Street West in Waterloo. The data centre has 4,240 kilowatts of available power and is actively looking for tenants to lease “rack space” of five kilowatts each.
While Quebec utilities increasingly place caps on power usage, their Ontario counterparts are more eager for a seat at the negotiating table with data centre providers. Given that utilities are owned and managed by the province, the participation of government in approving new data centres is crucial, experts say. That means that power purchase agreements for data centres are even more important than land acquisitions or leases.
“You are contracting for probably about 30 years of power usage, and you’re guaranteeing that if you get the power, you will use it,” Cervantes said. “It’s a negotiation with the government about economic development, spend, job creation, rejuvenating certain areas.”
Westward bound
Out west, Amazon Web Services has opened a data centre for cloud storage in Calgary, and there is increasing interest among Alberta’s provincial and municipal governments to provide discounted power and development sweeteners for new facilities.
The Alberta government has stated it wants to be a national powerhouse for AI development, relying on its ample amounts of natural gas production as well as renewable sources like solar and wind energy.
“A lot of the cloud players — Google, Amazon, Microsoft and the operators that serve them — are just becoming more comfortable deploying in Calgary and serving Western Canada,” Cervantes said.
“At the same time, the government is advertising an appetite to develop data centres and provide significant amounts of power.”
