On a sun‑baked day in Nanaimo, B.C., neighbours and lifelong residents found themselves facing a new kind of local infrastructure fight — not over a factory or a freeway, but over an incoming hyperscale data centre whose thirst could, opponents warn, strain municipal water supplies already stressed by drought and hotter summers.
The global race to build the physical underpinnings of artificial intelligence — large, power‑dense data centres that host the GPUs and accelerators realising modern generative AI — has created two paradoxes at once. First, communities are being sold economic promises: construction jobs, tax revenue, and “future” high‑tech employment. Second, those same projects carry quietly large resource demands: electricity measured in megawatts and water measured in millions of litres used for cooling. In Canada, federal and provincial incentives, abundant hydroelectricity in many regions, and a generally cool climate have made the country a magnet for hyperscale investment. But as projects multiply — and as critics point out examples abroad where promised water use estimates were exceeded — community resistance and regulatory gaps are surfacing.
This feature unpacks what data centres consume, why AI‑driven facilities are different, how Canadian projects are being permitted today, and what practical policy and technical paths can reduce risks to water security and community trust.
Local economic development messages emphasise:
These hindsight examples share common features:
At the same time, some Canadian facilities have been permitted without detailed metering or without clear stipulations tying water draw to declared cooling modes (for example, strictly permitting municipal potable water only when air‑cooling thresholds are exceeded). That combination — large allocations and limited ongoing transparency — is the core of community concern.
Public acceptance depends on trust. Trust is built when companies are candid about resource use, when municipal approvals are conservative and enforceable, and when communities are compensated fairly for any direct burdens. Where that trust breaks down, opposition has shown it can halt even billion‑dollar projects.
Practical steps are available and proven: conservative permitting, mandatory metering and public reporting, conditional approvals tied to cooling technology, and state/provincial support to strengthen municipal technical capacity. When municipalities insist on rigorous, enforceable water plans and when operators invest in low‑water cooling and full transparency, it is possible to reconcile local prosperity with water stewardship.
Failing to put those guardrails in place risks a future in which short‑term economic incentives give way to long legal battles, community backlash, and avoidable pressure on drinking water systems. The technology that powers modern life should not be built on hidden consumption; it must be engineered and governed to preserve the basic resources that sustain communities.
Source: CBC https://www.cbc.ca/news/ai-data-centre-canada-water-use-9.6939684
Background
The global race to build the physical underpinnings of artificial intelligence — large, power‑dense data centres that host the GPUs and accelerators realising modern generative AI — has created two paradoxes at once. First, communities are being sold economic promises: construction jobs, tax revenue, and “future” high‑tech employment. Second, those same projects carry quietly large resource demands: electricity measured in megawatts and water measured in millions of litres used for cooling. In Canada, federal and provincial incentives, abundant hydroelectricity in many regions, and a generally cool climate have made the country a magnet for hyperscale investment. But as projects multiply — and as critics point out examples abroad where promised water use estimates were exceeded — community resistance and regulatory gaps are surfacing.This feature unpacks what data centres consume, why AI‑driven facilities are different, how Canadian projects are being permitted today, and what practical policy and technical paths can reduce risks to water security and community trust.
Overview: Why AI data centres drink water
What data centres are asking for now
Modern hyperscale data centres are not the tidy rooms of the early internet era. They are purpose‑built campuses containing thousands of racks of servers and thousands more high‑performance processors humming 24/7. To run those processors reliably you need:- Continuous, resilient electrical power (often tens to hundreds of megawatts).
- Cooling systems that remove heat at extreme density and throughput.
- Redundant infrastructure for reliability and compliance.
Why AI increases water intensity
Generative AI workloads change the equation in two ways:- Density. AI models push more compute into smaller physical footprints. Higher compute density generates more heat per square metre than general cloud workloads, increasing the need for heavy cooling.
- Duty cycle. Inference and training workloads for large models can run continuously and unpredictably, limiting the effectiveness of intermittent or seasonal air cooling.
What the numbers say — and what they don’t
Representative figures
Several independent technical studies and industry filings provide a window into orders of magnitude:- Individual medium‑to‑large data centres have been shown to draw millions to hundreds of millions of litres of water per year for cooling, depending on size and cooling design.
- A single 100‑megawatt facility, using conventional evaporative cooling, can require on the order of a million to two million litres of water per day when operating with water‑intensive cooling systems.
- Research that focused on the water footprint of AI models — including training and inference — estimated significant consumptive water needs during training runs and projected large aggregate withdrawals as AI demand grows.
The limits of published figures
Two practical issues make transparent comparison hard:- Industry reporting is inconsistent. Some operators publish aggregate water withdrawals in sustainability reports, but few disclose per‑facility daily or annual consumptive volumes.
- Water accounting methodologies differ. "Withdrawal" vs "consumption" vs "evaporative loss" are technically distinct: water withdrawn from a utility may be partly returned to the system; what matters to a municipality is net consumptive loss and peak daily withdrawal when supply is limited.
The Canadian context: growth, incentives, and gaps in oversight
Policy environment and economic pitch
Canada has positioned itself as a desirable data‑centre market: relatively cool climate, abundant low‑carbon electricity in many provinces, and active federal and provincial incentives. Federal programs and provincial outreach have combined to encourage large cloud providers to acquire large tracts of land and pursue campus builds.Local economic development messages emphasise:
- Capital investment into previously underutilised land.
- Construction employment and potential indirect jobs.
- Property tax revenue and ancillary commercial activity.
Regulatory patchwork
But regulation governing water use for data centres in Canada is patchy:- Energy regulators often review grid‑connection and electrical load requirements, so power impacts get technical scrutiny.
- Water, however, is largely a municipal responsibility. Many municipalities may not have metering infrastructure or the technical staff to scrutinise complex cooling system forecasts.
- Where metering exists, it may be applied unevenly: some large commercial accounts are billed on flat or non‑volumetric rates, reducing visibility into true consumption.
Case examples and lessons
Overpromising and surprise usage elsewhere
International precedent provides cautionary tales. In multiple jurisdictions, initial public statements about planned water use for data centre campuses have been followed by much higher measured consumption once facilities ramped to full capacity or during hot years.These hindsight examples share common features:
- Initial forecasts were framed as “typical” or “current” usage and did not represent full‑capacity or worst‑case scenarios.
- Construction and ramp‑up phases incurred additional water use that was not always clearly separated from operating consumption in public disclosures.
- Local regulators and communities had limited ability to enforce conservative limits once permits were issued.
Canadian projects under scrutiny
In Canada, several large cloud operators have aggressively expanded land holdings and development plans. Some projects have received municipal approvals that include water allocations measured in litres per second or cubic metres per year. Where those allocations exist, they can equate to hundreds of millions or even over a billion litres a year for large campuses — volumes that matter when a community’s potable supply is constrained by drought or seasonal low flows.At the same time, some Canadian facilities have been permitted without detailed metering or without clear stipulations tying water draw to declared cooling modes (for example, strictly permitting municipal potable water only when air‑cooling thresholds are exceeded). That combination — large allocations and limited ongoing transparency — is the core of community concern.
Environmental and social risks
Competition for scarce water
In water‑stressed regions, data centres can compete directly with agricultural users, small businesses, and residents. Even where total annual use seems small in the context of municipal supply, the timing of withdrawals during heatwaves or droughts can create critical shortages. Municipal systems are sized for residential and traditional industrial loads; sudden spikes for bio‑industrial cooling can exceed routine provisioning.Lock‑in of high‑water infrastructure
If a region permits multiple water‑intensive data centres early in the development cycle, the cumulative burden may push municipalities into hard choices later: either invest in new, expensive water infrastructure; restrict other local water uses; or face public backlash and litigation.Reputational and legal consequences
Operators that understate or obscure their water use risk reputational damage. Where local communities perceive that promises were made and then broken, opposition can grow rapidly — leading to delays, lawsuits, and cancellations that damage both corporate and municipal interests.Industry responses and technical alternatives
Cooling design choices
Data centre design can dramatically alter water intensity. Cooling options include:- Air cooling (free‑air economisation): uses outside air when ambient conditions permit and can eliminate water use most of the year in colder climates.
- Closed‑loop water systems and liquid immersion cooling: highly efficient but still may require some water for heat rejection, depending on the heat sink.
- Use of non‑potable water (reclaimed or industrial): avoids stressing potable supplies but requires treatment and local approvals.
- Direct evaporative cooling: effective but water‑consumptive.
- Hybrid systems: default to air cooling and only use water during extreme ambient conditions.
Corporate commitments and their limitations
Some operators publish high‑level sustainability commitments, including pledges to deploy air cooling where feasible or to use recycled water. However, independent verification is uneven. Where operators commit to drawing municipal water only above certain temperature thresholds, critics have shown that hot years, construction periods, or misclassification of operational modes can still drive significant potable withdrawals.Practical recommendations — technical, regulatory, and municipal
For municipalities evaluating proposals
- Require third‑party, scenario‑based water demand modelling: permit applications must include full‑capacity worst‑case estimates, seasonal and daily peak demand curves, and separate line items for construction vs operations.
- Mandate volumetric metering and public reporting: facilities drawing municipal water should be metered with real‑time or monthly public reporting to a municipal portal, and billing should reflect measured volumes.
- Permit conditional allocations tied to cooling technology: approvals should specify allowable cooling modes and require binding transitions to lower‑water designs over time.
- Insist on non‑potable sources where feasible: require proof that alternative water (recycled, reclaimed, or treated industrial) has been considered and that potable draw is minimized.
- Require water‑risk offsets only as a last resort: market tools like water credits can be useful but should not substitute for reducing on‑site potable use.
For provincial and federal policymakers
- Establish standardized reporting requirements for water withdrawals and consumption at data centre facilities, with harmonized definitions of “withdrawal” vs “consumption.”
- Tie public incentives to demonstrated low water intensity per unit of compute, not merely to job creation metrics.
- Fund technical assistance to municipalities so planning departments can properly evaluate highly technical cooling and water modelling.
For operators and cloud providers
- Publish facility‑level water metrics under a standardised framework, including total withdrawals, net consumption (evaporative loss), reuse rates, and source type (potable vs non‑potable).
- Design future campuses with water‑minimal cooling as a default, with air‑first strategies and reserved water only for emergency contingencies.
- Build community water advisory committees for major campus projects that meet regularly and receive measured water use data.
Balancing the books: jobs, growth, and the public trust
The economic argument for data centres — large capital inflows, construction activity, and potential local spend — is real and can be beneficial. But the jobs picture is often misread: operating hyperscale campuses tends to produce a relatively small number of permanent on‑site technical roles compared to the headline construction jobs, and many hosting profits return to multinational firms rather than local economies.Public acceptance depends on trust. Trust is built when companies are candid about resource use, when municipal approvals are conservative and enforceable, and when communities are compensated fairly for any direct burdens. Where that trust breaks down, opposition has shown it can halt even billion‑dollar projects.
What measurable progress looks like
A credible, forward‑looking approach would include measurable, verifiable milestones:- Full‑scope water audits for each data centre campus, independently verified and updated annually.
- Mandatory real‑time metering (or at least monthly reporting) of potable and non‑potable draws published by municipalities.
- Cooling technology transition plans embedded in permits, with sunset clauses for high‑water approaches.
- Financial surety (bonds) that can be drawn on if water usage surpasses agreed thresholds in ways that harm municipal supply.
Risks to watch
- Cumulative impact: One facility alone may be manageable, but multiple projects in a watershed can produce systemic stress.
- Climate volatility: Historical water availability is a poor predictor of future supply under climate change; planning must assume hotter, drier summers and more intense demand peaks.
- Transparency gap: Without consistent disclosures, community monitoring is impossible; lack of data is itself a major risk factor.
- Technological complacency: Overreliance on promises of future water‑efficient designs without enforceable commitments creates regulatory and reputational exposure.
Conclusions
Canada stands at a crossroads between capturing economic value from the AI infrastructure boom and protecting its most precious public good: water. The physical reality is simple — high‑performance AI infrastructure requires both power and cooling. The policy question is not whether data centres should exist in Canada, but how they should be regulated and designed so their presence does not impair human and ecological water needs.Practical steps are available and proven: conservative permitting, mandatory metering and public reporting, conditional approvals tied to cooling technology, and state/provincial support to strengthen municipal technical capacity. When municipalities insist on rigorous, enforceable water plans and when operators invest in low‑water cooling and full transparency, it is possible to reconcile local prosperity with water stewardship.
Failing to put those guardrails in place risks a future in which short‑term economic incentives give way to long legal battles, community backlash, and avoidable pressure on drinking water systems. The technology that powers modern life should not be built on hidden consumption; it must be engineered and governed to preserve the basic resources that sustain communities.
Source: CBC https://www.cbc.ca/news/ai-data-centre-canada-water-use-9.6939684