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Canada wants to build data centres that are not just physically located here, but controlled here — a distinction experts say could determine whether the country can reduce its dependence on U.S. tech giants and keep Canadian data subject to Canadian rules.
But as Ottawa reviews more than 160 data-centre proposals to support the growing demands of artificial intelligence, the promise of “sovereign” infrastructure is already running into a harder question: how much control Canada can really have over data centres that may still rely on foreign hardware, foreign customers and digital networks that do not always respect national borders.
“This is probably going to be one of the single biggest tech issues that we are going to deal with as a country,” said Ritesh Kotak, a Toronto-based lawyer and technology advisor.
Many countries, including Canada, are heavily dependent on U.S. firms for digital and cloud services — the remote computing and data storage offered by technology giants such as Amazon and Microsoft.
Recently, a Canadian launched a lawsuit against the U.S. Department of Homeland Security, which allegedly sought “vast swaths of information” through Google, about his personal life following social media posts critical of Donald Trump’s administration.
U.S. laws give the country’s intelligence and law-enforcement services broad powers to access data.
“It’s not the first time nor will it be the last time where foreign governments have requested data on Canadian citizens,” said Kotak.
That concern is now shaping Ottawa’s push to build more Canadian-based AI infrastructure.
Telus is the first successful applicant for the federal data-centre program, although negotiations with Ottawa are ongoing and no federal funding has been committed.
New data centres developed in Canada with federal government support will have a sovereignty requirement, said Evan Solomon, minister of artificial intelligence and digital innovation.
In the most recent federal budget, the government pledged $925.6 million over five years to support “large-scale sovereign public AI infrastructure.”
Telecoms see momentum
On the heels of Telus’s announcement this week with the federal government to develop three new data centres, the chief executive of Bell Canada said he is excited about the momentum that is building to develop large-scale AI infrastructure in Canada.
“We’re starting to see some activity,” said Mirko Bibic. “The government is creating some ambition and some energy around making sure that we seize our AI moment as a country.”
The federal government, along with many Canadian technology leaders, are pushing the importance of data sovereignty, although there are questions about how much foreign involvement there will be in Canadian data centres.
“It’s nice to see that there’s momentum building,” said Bibic, in an interview with CBC News at Web Summit in Vancouver, an international technology conference.
“We can have something that’s built and made in Canada, for Canadians, in a sovereign way.”
Construction is underway on a new 300-megawatt Bell data centre near Regina after the company announced in March that it would spend $1.7 billion over the next two years.
Can Canada keep control?
But building data centres in Canada does not, on its own, resolve questions about control.
Not all of the physical equipment will be produced in Canada. For instance, Telus’s new facilities will house more than 60,000 graphics processing units from Nvidia once fully operational.
In addition, Solomon said data-centre developers and operators won’t be required to only serve Canadian governments and industry.
“We’re not here to determine who their customer is,” he said. “They’ll be allowed to host different data.”
The federal government is open to different funding models, Solomon said, as some data-centre developers are seeking financing to build the projects or a financial backstop from Ottawa.
“We are going to do business with the United States. They’re our biggest customer and sovereignty is not solitude. But I will tell you the opportunity and the geopolitical realignment that has happened has created a huge opportunity for countries like Canada,” said Solomon.
For some in the technology sector, the answer is not to avoid foreign technology altogether, but to ensure Canadian companies responsibly control the infrastructure.
Sovereignty is more than location
Canadian data centres should use the best technology in the world, but be operated by Canadian firms that also control the network with Canadian governance, said Louis Têtu, the executive chairman of Montreal-based Coveo, an AI platform with 800 employees in Canada.
“That allows us to essentially make sure that we are immune to geopolitics; to anybody else trying to turn us off. And it’s a national interest imperative,” he said.
Telus will build a new AI data centre in B.C., under the federal Enabling Large-Scale Sovereign AI Data Centres initiative, Minister of Artificial Intelligence and Digital Innovation Evan Solomon announced on Monday. The project ‘reflects the kind of ambitious infrastructure that we need as a country,’ Solomon said.
Some privacy experts are encouraged by the increased focus on data sovereignty, but await more regulations from Ottawa as part of the promised federal AI strategy.
“Having the data in Canada is one thing. Having the companies that build and own the facilities be Canadian is important. Having them operate within Canada is also critical,” said Sharon Polsky, president of the Privacy & Access Council of Canada.
Among potential regulations, Polsky wonders whether private sector companies involved in data centres and telecommunications should be restricted from foreign ownership.
There are also questions about the difficulty of keeping Canadian data within the country’s borders, considering how information flows in a digital world.
“The national borders are not always guaranteed to be respected by digital traffic,” said Rudi Carolsfeld, the co-founder of Green Edge Computing, a Victoria-based startup. “You’d have to isolate the network to keep it.”
Green Edge specializes in small-scale data centres, suited for a small community or company that wants to store its own data locally.
“There’s a lot of concern around not just where you store the data, but actually where it travels.”
