AI FACING STRONG HEADWINDS
In the last several months, Time, Macleans, the Atlantic, the New Yorker, and the Smithsonian Magazine have all devoted articles to Artificial Intelligence (AI). Discussions about AI and the data centres on which it relies are found daily in the press. Those discussions are often heated and include dramatic claims both pro and con.
The AI controversy is reminiscent of the the strong feelings expressed about how our energy systems must evolve to reduce their strain on the natural environment. It’s fair to suggest that there is broad recognition that, however imperfect those systems are currently, they do sustain an enviable Canadian standard of living.
There are concerns about the environmental, economic, and social impacts of data centres on host communities and the country in general. This is to be expected, given the number, scale, and rapidity with which data centres are being built. What distinguishes the data centre controversy issue from the emissions debate, is that it includes challenges to the end product the centres produce. Data centres can have significant impacts on electricity generation, water use, and public finances while producing a service that some would argue is neither necessary nor entirely benign.
The AI challenge is less about modifying an existing technology and more about the unknown impact of a revolutionary new technology which is both evolving rapidly and which has the potential to reconfigure a broad array of human activity. There appear to be two fundamental questions to answer.
- Can the benefits of AI be enjoyed while any risks it might pose to human welfare be neutralized or eliminated?
- Can the data centres on which AI depends be integrated into the energy, and other public utility, systems without disrupting existing services and the economic terms under which they are provided?
To take on the challenge of data centres to the environment and the energy sector, it helps to define terms. The cybersecurity company, Fortinet, has posted an introduction to data centres on its website.
A data centre is a centralized physical facility that stores businesses’ critical applications and data. A common data center definition is a location where computing and networking equipment is used to collect, process, and store data, as well as to distribute and enable access to resources.
What distinguishes data centres (or specifically “hyperscale” facilities) is the mass of data that is stored and manipulated. It is orders of magnitude larger than what has been common up to now. An International Energy Agency study concluded that a ChatGPT AI request needs 10 times the electricity used in a simple Google search.
In an article published in the Harvard Gazette discussing the reasons for community resistance to data centres, the “standard definition” of a hyperscale data centre (the scale necessary to support AI functions) is described as a facility occupying over 10,000 square feet and containing 5,000 servers. Servers that need to be powered and cooled. The demand for electricity and cooling water is significant, from which arises local concerns about the resultant availability and cost of those resources for existing users. The Harvard Gazette article notes that a centre is planned for Michigan that would occupy 2 million square feet and use 1.4 gigawatts of electricity. According to the article, that is the equivalent to the energy use of a million households.
Data centre designs are continuing to evolve, in part to reduce electricity use and water for cooling. This can involve recycling cooling water or, indeed, using fluids other than water to cool the facilities.
The potential energy impacts of AI remain to be seen. Its development, however, is a part of a movement to electrify at least the developed economies at an accelerating pace, in part to address concerns about high-emission energy sources. The industries that are critical to this development are putting efforts into improving facility designs, finding ways to reduce negative environmental and economic impacts, without compromising the associated benefits. This will undoubtedly require increased energy capacity, in terms of both invested capital and human resources.
Energy Council of Canada is working with allied industry associations and the federal government to prepare for the impact of these trends on the energy sector labour market. (See below.)
Activity
NORTH AMERICA AND INTERNATIONAL OUTREACH
ECC Communications Regarding Energy Industries International Opportunities
July – September 2026
- CANCarib Climate Smart Opportunities Summit 2026 in Jamaica and the Bahamas registration invitation.
- The Global Affairs Canada Oil & Gas Commercial Mission to Mexico 2026will visit Mexico City from September 28 to 30, 2026 and is inviting firms to consider applying to fill the last remaining spots in the delegation.
- The next World Energy Congresswill take place from 26 to 29 April 2027 in Riyadh, Saudi Arabia. It will be hosted by the World Energy Council and the government of Saudi Arabia. Members of the Canadian energy sector are invited to attend.
- The Government of the Bahamasinvites bids for the provision of two step down transformers. The project site is Marsh Harbour, Abaco (The Bahamas).
- The Ministry of Energy, Transport and Telecommunications (METT) of the Government of Jamaica intends to engage an independent, technically qualified consultant to conduct a comprehensive review of the JPS System Shutdown Reporton the all-island outage on June 5, 2026 and the shutdown event
- The Port Authority of Jamaica invites proposals from eligible and qualified suppliers for the Design, Supply, Installation, Testing, and Commissioning of a 118.8 kWDC (100 kW AC) Grid-Tied Photovoltaic System at Harbours, Port Authority.
- The National Water Commission of Jamaica is inviting bids for the Hermitage Dam Rehabilitation Project. The work will involve the Final Design for the rehabilitation and construction of the site access, including all necessary calculations, drawings, and technical documentation, to be submitted to the Engineer for review and approval prior to execution, and will also involve responsibility for the maintenance of the access roads during construction.
- Canada’s Trade Commissioner Service is recruiting a Canadian business delegation to join the Honourable Maninder Sidhu, Minister of International Trade, for a Team Canada Trade Mission to India.
- The Water Authority – Cayman invites prospective Bidders to submit bids for the Operating Agreement for Two (2) Sea Water Reverse Osmosis Plants on Grand Cayman, Cayman Islands (2026).
ENERGY & ELECTRICITY WORKFORCE ALLIANCE
On September 5, 2025, the Government of Canada announced bold measures to protect, build and transform Canadian industries most affected by tariffs and global trade disruptions. As part of this response, six Workforce Alliances are being established to mobilize industry leaders, workers and training institutions around a shared national vision: building a workforce that is skilled, adaptable and ready to meet Canada’s economic challenges.
The Energy & Electricity Work Force Alliance is a part of this initiative. The Energy Council of Canada, Electricity Human Resources Canada, and the Canadian Renewable Energy Association form the alliance. The objective of the work is to assess the capability of the energy industries to recruit, train, and employ the human resources necessary to meet the demands of energy consumers both domestic and international.
Energy & Electricity Workforce Alliance
Announcement and Press Conference
Press Release
Sept. 2, 2026 | Ottawa, ON – Electricity Human Resources Canada (EHRC), the Energy Council of Canada and the Canadian Renewable Energy Association (CanREA) today announced the launch of the Energy and Electricity Workforce Alliance, a national initiative to ensure Canada has the skilled workers needed to build energy infrastructure, support major projects, meet growing demand across energy systems and advance the country’s broader economic agenda.
The Alliance is one of six sector workforce alliances announced by the federal government to address pressing labour market challenges across industries of strategic and economic importance. Its creation underscores the critical role energy plays in the country’s future. The announcement was made in Ottawa in partnership with the Government of Canada …
ENERGY NEWS
July
Landmark Indigenous Equity Option Creates Potential for One of Canada’s Largest Indigenous Ownership Stakes in Energy Infrastructure at LNG Canada
LNG Canada and its Joint Venture Participants (JVPs) today announced a historic equity option agreement with MNT Investments LP, a limited partnership of the economic development organizations of five First Nations neighbouring LNG Canada’s operations: Gitga’at First Nation, Gitxaała Nation, Haisla Nation, Kitselas First Nation and Kitsumkalum …
Yellowhead natural gas pipeline approved, ATCO’s Canadian Utilities says
Construction is poised to begin right away on a new $2.9-billion natural gas pipeline in central Alberta after the provincial power regulator approved the Yellowhead project proposed by Canadian Utilities Ltd. …
New wind farm highlights potential for more Canadian-Polish collaboration, Hodgson says
A new US$6-billion offshore wind farm in Poland, backed by Canada’s Northland Power Inc., is expected to be just the beginning of a series of investments between the two countries, Natural Resources Minister Tim Hodgson said
Construction Begins on $4B Enbridge Natural Gas Pipeline Expansion in B.C.
Enbridge Inc. has broken ground on a $4-billion natural gas pipeline expansion in British Columbia. The federal government approved the Sunrise Expansion Program in April. The project aims to add another 300 million cubic feet per day of transportation.
August
Québec, Newfoundland, and Federal Government Agree to Churchill Falls Investment
Ottawa will provide $10 billion in financing to upgrade and expand the Churchill Falls generating station, develop the Gull Island hydroelectric project, build transmission lines and implement a 2,000 MW onshore wind energy project in Labrador — with the exact location and other details for that wind project under consideration by Newfoundland and Labrador Hydro.
Asian Demand for Canadian Oil Is Rising
Trans Mountain Corp. has asked the Canada Energy Regulator for permission to set aside 90 per cent of the line for those shippers, up from 80 per cent. It wants an answer by Oct. 1 and the change in place by January.
The previous round of long-term contracts, which closed in June, “demonstrated strong demand for long-term transportation service” on the line, Mark Maki, Trans Mountain’s chief executive, said when the company filed the request.
He said with the system “running at full or near full capacity for months,” the company is focused on getting more out of the infrastructure it already has.
Trans Mountain has loaded 528 tankers since the expanded line opened in May 2024, and 64 per cent of them went to Asia, according to the company’s first-quarter results.
Manufacturers Addressing Electricity Grid Equipment Constraints
As expansion plans for North America’s electrical grid begin to take shape after a period of relative stagnation, few components have been more difficult to obtain than power transformers. Their availability has dwindled, to the point where utilities can wait several years to get their hands on one.
Manufacturers are scrambling to keep up: Switzerland-based Hitachi Energy
has bought land adjacent to its transformer manufacturing plant in Varennes, Que., near Montreal, and is now laying rebar and pouring concrete. It’s the early stages of an expansion intended to triple the plant’s output.
More than 30 kilometres south, in Candiac, Que., another plant is being modernized to double its production of steel utility towers. Stella-Jones, a leading manufacturer of wood utility poles, purchased the plant last year. It’s scheduled to resume production in August.
September
Government Removes Certain Classes of Projects from IAA Project List
On 3 September 2026 the Government of Canada changed regulations promulgated under the Impact Assessment Act (IAA) to simplify and improve the efficiency of the review processes for major projects. As part of these changes, responsibility for the assessment of certain projects is being assigned to the federal life cycle regulator responsible for those projects.
Therefore, amendments to the Physical Activities Regulations (Project List) are required to remove project types that are currently subject to both the Impact Assessment Act (IAA) and the Canadian Energy Regulator Act (CERA). These projects will be subject to assessment and ongoing regulation by a single regulator under the CERA or will be assessed under the Building Canada Act if designated as a project of national interest.
Among the changes of particular interest to the energy sector are that:
- International and interprovincial pipelines and electrical transmission lines,
- offshore renewable energy projects that are regulated under the CERA,
- oil and gas pipelines and facilities in national parks and protected areas that are regulated under the CERA,
are no longer subject to the Impact Assessment Act.
Oil and Gas Industry Optimistic About Expansion of Mega Productivity Deduction Eligibility
The federal government’s announcement that the accelerated tax write-off for capital investments will be expanded to a greater number of investment projects was positively greeted by the oil and gas industry. For a capital-intensive industry this will change the economics for a number of projects currently on the shelf.
The oilsands is an industry marked by megaprojects. The federal government has just rolled out a new “productivity mega deduction.” Alberta and the energy sector hope Ottawa’s latest move will unleash an investment boom in the oilsands, one that rivals the surge of spending and production that flowed after similar changes were made in the 1990s and early 2000s. “All of the stars are aligning,” said Heather Exner-Pirot, director of natural resources, energy and environment at the Macdonald-Laurier Institute.
Ontario Starts Construction on Pickering Nuclear Refurbishment
From ontario.ca: As President Trump continues to target Ontario’s economy, the government is acting to secure Ontario’s energy future with the start of construction on the Pickering Nuclear Generating Station refurbishment, Canada’s largest clean energy infrastructure project. As part of its plan to protect Ontario and build a stronger, more self-reliant economy, the project will extend the life of Pickering’s four CANDU reactors by up to 38 years, creating approximately 30,500 jobs annually during construction and 7,500 jobs across Canada over its lifespan. By greenlighting this job-creating project, Ontario is securing decades of reliable, affordable and clean power that Ontario needs to build new homes, attract investment and grow a stronger, more self-reliant economy.
“When the previous government planned to shut down Pickering, our government chose to protect 4,500 jobs and create 30,500 new jobs by doubling down on Canadian workers, technology and energy sovereignty,” said Stephen Lecce, Minister of Energy and Mines. “Today, we are marking a national achievement as we begin work on Canada’s largest clean energy infrastructure project and strengthen our made-in-Ontario nuclear supply chain. The best way Ontario can fight back against President Trump is to build big, which is why we are saying yes to 30,500 jobs, 38 more years of clean power and a stronger Ontario economy. I’m proud that we are not only moving this historic project forward, but awarding contracts that will keep more than 90 per cent of project costs right here in Ontario.”
BY THE NUMBERS
Lithium-ion Batteries Are Improving the Economics of EVs and Renewable Energy
In 1991, it has been reported, 131 kilowatt-hours of lithium-ion battery capacity was produced worldwide. By 2023 global cumulative production had increased by a factor of 27 million. Commercially viable energy storage is the key to integrating intermittent renewable energy into the grid.
The increase in battery production was driven by a dramatic reduction in the cost of batteries.
The reduction is the result of increasing competition in the battery industry, which in turn produces a wider source of incremental improvements and efficiencies in the production process.
From 1998, every time cumulative production doubled, the price of batteries declined by 19%, as producers progressed along the learning curve. In the early years the batteries were used almost exclusively in small-scale electronic devices. As energy density increased (it’s now 3 times greater than in the early 1990s), batteries could be made smaller, reducing their weight and shrinking their dimensions per unit of energy stored. This has allowed them to be used in vehicles and has opened the possibility of wind and photovoltaic energy sources to become economic without reliance on other generating sources to ensure continuous electricity supply.