The environmental cost of Montreal data centres
As AI grows, researchers raise questions on its environmental impact and economic benefits
As artificial intelligence expands and new data centres crop up in Quebec, environmental researchers warn that the digital infrastructure powering the technology could place strain on electricity and water systems.
Demand for data centres has gone up globally as companies race to build the computing infrastructure needed to train and operate large AI models. Montreal has been identified as a potential hub for this development, thanks to its relatively cheap hydroelectric power.
But experts say the environmental consequences of these facilities are still poorly understood.
“They’re using enough to put the strain on the electricity grid,” said Olivier Chalifour, a Concordia University PhD candidate studying AI applications in climate modelling. “It's almost exponential.”
Chalifour said large AI servers require powerful processors that generate significant heat and must be cooled continuously, a process that often requires large volumes of fresh water. That water is used to absorb heat from servers and then cooled again in large towers before being reused or discharged.
A recent CBC News analysis found that data centres powering AI can consume millions of litres of water annually from cooling alone.
When looking at powering the centres, the environmental implications in Quebec are somewhat different.
The province’s electricity system is dominated by hydroelectric power, which produces far fewer greenhouse-gas emissions than fossil-fuel-based grids, more common in the United States.
Still, the availability of that electricity is not unlimited.
Normand Mousseau, scientific director of the Trottier energy institute at Polytechnique Montréal, said the larger environmental concern may be how much electricity these facilities could eventually consume.
“Hydro-Québec would see [usage] multiplying by five, roughly this demand over the next 10 years,” Mousseau said, referring to projected electricity use by data centres in the province.
At the moment, the sector represents a relatively small portion of Quebec’s electricity demand.
Mousseau estimates current data-centre consumption lies at around 200 megawatts, compared to roughly 12,000 megawatts used by the industry across the province.
The challenge with this level of consumption, he said, lies in the scale of new facilities being proposed.
“The new [centres] are enormous, and one setting could consume 100 megawatt today,” Mousseau said.
Hydro-Québec has already begun examining how to manage the growth in energy consumption, revealed through a recent proposal on new electricity pricing for large data centres as demand from the sector rises.
At the same time, provincial officials have signalled interest in attracting more AI infrastructure.
In December 2025, the Coalition Avenir Québec government marked out plans to support new AI initiatives and related projects.
Commercial real-estate analysts have identified Montreal as one of Canada’s fastest-growing data-centre markets, citing its access to renewable electricity and dense fibre-optic networks as advantages.
“Usually, the main positive argument for developing new industries is it will bring wealth, it will bring new jobs, but for data centres, there are very few jobs associated to data centres.” — Fabien-Kenzo Sato, Conseil régional de l’environnement de Montréal
Meanwhile, investment funds have begun financing new facilities designed specifically for AI workloads.
Yet, the economic benefits of these projects remain contested.
Fabien-Kenzo Sato, managing director of the Conseil régional de l’environnement de Montréal, said the economic case for large data centres is often overstated.
While new industries are frequently promoted as engines of job creation and local wealth, he argued the reality of data-centre infrastructure is very different.
“Usually, the main positive argument for developing new industries is it will bring wealth, it will bring new jobs,” Sato said. “But for data centres, there are very few jobs associated to data centres.”
Mousseau warned that large computing facilities could compete with other priorities for Quebec’s electricity supply, particularly as governments attempt to electrify transportation and reduce emissions in other sectors.
Meanwhile, Chalifour said he believes the environmental debate surrounding AI should not be reduced to a single factor such as carbon emissions. He added that electricity use, water consumption and infrastructure demand must all be considered together.
“It's really important enough that it can cause a shortage of electricity if there's too much on the grid,” Chalifour said.
Looking to the future, municipal officials have also begun exploring local AI use.
Earlier this year, the City of Montreal announced plans to develop an AI-powered “digital twin” system, designed to simulate construction projects and potentially reduce disruptions such as road closures.
The City of Montreal was contacted with questions about the digital twin initiative and its use of AI, but did not respond before publication.
For now, the debate surrounding data centres in Quebec remains largely theoretical.
This article originally appeared in Volume 46, Issue 11, published March 17, 2026.
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