Five years after Google announced plans to build a $735-million hyperscale data centre in Beauharnois, its 63-hectare site remains an empty field, with no construction date in sight.
Google maintains the project is moving forward. The City of Beauharnois says the building has been designed and municipal planning continues.
But the electricity to power the facility has yet to be approved.
Hydro-Québec wants to charge large data centres more for use of its electric grid — about 13 cents per kilowatt-hour, roughly twice what large-scale, energy-intensive businesses currently pay. In filings with the Régie de l’énergie, the provincial regulator, Google has called the proposed price increase “unreasonable and punitive” — and warned that the project’s feasibility “would be directly affected.”
This uncertainty around Beauharnois comes as the data-centre industry itself is changing rapidly.
Artificial intelligence (AI) is driving demand for facilities far larger than the ones Quebec has hosted in the past, turning what was once largely invisible infrastructure into hyperscale projects that compete for land, grid capacity and public acceptance. For Quebec, the question remains how to handle this new generation of data centres that others are trying to build quickly — without giving up control over a scarce public resource or moving so slowly that the industry builds elsewhere.
Between 2016 and 2022, Hydro-Québec actively promoted Quebec as a destination for data centres, marketing its low-cost, reliable and renewable electricity at a time when the province still had surplus power. The number of data centres connected to Hydro-Québec’s system rose from 39 in 2019 to 67 in 2024.
Hydro-Québec says Quebec’s existing data-centre customers draw roughly 190 megawatts during periods of peak demand. By 2035, it expects demand from the sector to skyrocket.
Just how much became clear at hearings held this week by the Régie to study the proposed rate hike, which if approved will take effect in early 2027 and be phased in over five years. Several data centre developers, including Google, have been making their case against the hike at those hearings.
On Monday, Google pressed Hydro-Québec on whether the expected growth in data-centre demand justifies creating a new, higher tariff for the sector.
Hydro-Québec confirmed that about 850 megawatts have already been allocated to data centres, but only 11 megawatts have been authorized since 2023. But it said those figures do not capture the potential scale of future demand: another 2,500 megawatts of requests are now under review.
That is equivalent to powering 1.5 to 2 million homes per year, the utility explained.
Many of the data centres already operating in Quebec attract little attention.
“They are kind of among us without really being seen,” said François Bouffard, a professor of electrical and computer engineering at McGill University.
A database compiled by Collectif NRS from publicly available information lists 34 data centres in operation on Montreal Island, nearly half of Quebec’s share. For instance, Cologix operates facilities in and around downtown Montreal, while eStruxture occupies The Gazette’s former printing plant on St-Jacques St., where servers have replaced the presses that once produced the newspaper.
What is changing is their scale.
Research by Alexander Carlo and Lyndsey Rolheiser of York University found that active data centres in Canada average 11.3 megawatts of capacity. Announced projects are expected to average 122 megawatts — more than 10 times as much.
“The newer ones are a lot larger than the operational ones,” Carlo said.
That shift can already be seen in Quebec. QScale’s Q01 campus in Lévis is being developed as a 142-megawatt facility built for AI and other intensive computing.
The potential scale of Google’s Beauharnois project remains unclear but reports indicate it requested 380 megawatts. Google did not confirm that figure, saying only that the facility would “help Canadian businesses capitalize on artificial intelligence and strengthen the country’s digital infrastructure.”
Right now, Quebec is second only to Ontario in terms of active data centres, research by the York professors show. But it only has seven projects in the planning stage.
Alberta is poised to become the leader in Canada for such hyper-scale data centres. It has 20 active data centres, the York data shows, but 167 announced or under-construction projects. Measured by planned electricity capacity, Alberta is expected to account for 92 per cent of the country’s projected digital AI infrastructure.
Carlo, however, cautioned that counting facilities can hide the scale of the shift.
“A province could theoretically have dozens of small data centres whose combined capacity is eclipsed by one hyperscale campus,” Carlo said.
In July, Meta broke ground on a $13-billion, one-gigawatt AI data-centre campus north of Edmonton. The project is paired with a dedicated 932-megawatt natural gas plant expected to supply much of its electricity.
Bouffard described the approach as “bring your own power.”
“They’re coming with a completely different approach,” he said.
Alberta’s deregulated electricity market is what makes that approach possible, said Carlo and Rolheiser. It allows data-centre developers to pair projects with other energy sources, including natural gas, instead of waiting for a public utility to allocate electricity from a constrained grid.
Saskatchewan has taken a similar approach. Bell’s planned AI data-centre hub near Regina would start with 300 megawatts supplied by SaskPower, then expand up to 900 megawatts of additional capacity provided by Bell under Saskatchewan’s “bring your own power” model. At full buildout, the project could reach 1.2 gigawatts.
Quebec offers a different bargain: predominantly hydroelectric power, but less freedom over where and how quickly an enormous new load can be connected.
A project requiring hundreds of megawatts has to be built close to the transmission network, where the distribution system can actually deliver that amount of power — or additional infrastructure has to be constructed, Bouffard said.
A new Churchill Falls agreement announced in August 2026 is expected to eventually double the Labrador electricity available to Hydro-Québec, including through upgrades to Churchill Falls and the development of Gull Island. But that new capacity is still years away.
For data centres trying to connect now, Bouffard said, that timeline matters. “Churchill Falls, we will not start seeing any impact for at least a good 10 years,” he said. “Nothing will really come online till much later. So we’re not in that same horizon of time.”
The speed at which projects are hooked up to their power source “is more problematic than the price of energy,” Bouffard said.
And in Quebec, being technically possible does not mean a project automatically gets the electricity.
Since 2023, new projects requesting at least five megawatts have required provincial authorization. The government and Hydro-Québec assess projects according to their effects on the electricity system and their economic, environmental and social benefits, among other criteria.
Hydr-Québec spokesperson Cendrix Bouchard said data centres do not get special treatment.
“We don’t use a different approach for data centres than any other use or company in Quebec,” Bouchard said. “Everything starting at five megawatts and beyond, it’s the same process.”
Félicia Nicole, a spokesperson for the Ministry of Economy, Innovation and Energy, said Quebec is operating “in a context of a tight electricity balance” and must maximize the economic, social and environmental benefits of projects requesting at least five megawatts.
The ministry does not publicly discuss projects under analysis, Nicole said, and declined to confirm whether Google’s Beauharnois project is still under consideration.
“There are growing concerns over the lack of transparency,” said Johanne Whitmore, a senior researcher at HEC Montréal’s chair in energy sector management.
“We don’t know how the decisions are made. We kind of just have to trust that they’re making the best decision for us on how they allocate those blocks.”
Those choices matter because Quebec is trying to use electricity for several purposes at once.
“The province needs more power to reduce the oil and gas used in transportation, buildings and industry," Whitmore said. "At the same time, it wants electricity available to attract new industries.”
“What we have to balance is how much of that power we keep for ourselves versus what we use to attract new industries like AI data centres,” she said.
The tension is becoming increasingly public.
At Montreal’s ALL IN AI conference in September, industry and government leaders met to promote investment in AI and the infrastructure needed to support it. Outside the Palais des congrès, protesters raised concerns about the technology’s environmental footprint, including the electricity, water and land consumed by data centres.
Opposition has also emerged in Sherbrooke, where residents have raised concerns about a proposed 96-megawatt data-centre project by U.S.-based Keel Infrastructure.
Pierre-Olivier Pineau, who holds the chair in energy sector management at HEC Montréal, said Quebecers should not reject data centres outright. There is a strategic argument for hosting more digital infrastructure in the province, particularly if Quebec wants greater control over the data and systems used by governments, companies and AI developers, he said.
But this does not mean the province should rush to accommodate every project.
“Data centres are the flavour of the month,” Pineau said. “But governments have to be careful not to build an energy strategy around whatever sector is fashionable at the moment.”
“Quebec has to decide how many it can accommodate while electricity is also needed for transportation, buildings, industry and other priorities," Pineau said.
The question, he said, is not only whether a company can pay for the power it uses. It is what conditions should come with access to it.
For Pineau, one of those conditions should be heat recovery.
Data centres produce large amounts of heat as servers run and are cooled. In many facilities, heat is simply released outside. Pineau said Quebec should require new data centres to reuse it where possible — for example, to heat buildings, greenhouses or other facilities that need low-temperature heat.
The environmental impact of a data centre therefore depends heavily on how it is designed.
QScale says its Lévis campus uses a closed-loop cooling system that recirculates water. It is also designed to recover waste heat for uses such as at nearby greenhouse agriculture. At full scale, the company says as much as 96 megawatts of heat could be reused, enough to heat more than 15,000 Quebec homes.
In L’Ancienne-Lorette, near Quebec City, the community is benefiting directly from a Microsoft data centre being built there.
The city’s 2026 budget cited new revenues from Microsoft as one of the factors behind a five-per-cent reduction in residential tax bills. The mayor said the Microsoft facility would bring the city more than $2 million a year.
But as a general rule, the economic benefits of data centres can be difficult to measure, Bouffard said.
When Google announced Beauharnois in 2021, it estimated that between 300 and 500 people could work on the project at the peak of construction. Once in operation, the data centre was expected to employ at least 20 to 30 people in skilled positions.
Bouffard cautioned against judging a data centre solely by the number of people working inside it.
“We have to look at all the side benefits that come with them. It’s not just jobs per se,” Bouffard said.
Access to large-scale computing infrastructure can help startups and other businesses move faster, reach markets sooner and create higher-value economic activity beyond the relatively small number of people employed inside a data centre, he said. Companies profit from building the infrastructure.
Another important value Bouffard says must be considered when assessing data centres: digital sovereignty.
Bouffard said Canada has a strategic interest in maintaining some of the digital infrastructure used by governments, businesses and sensitive sectors such as health care and banking within the country.
But keeping that infrastructure physically in Quebec does not necessarily mean keeping it under Quebec or Canadian control.
In May, U.S.-based Goldman Sachs Alternatives acquired QScale in partnership with its founders and management, who reinvested and continue to lead the company.
And the location of the building does not necessarily determine where the information it processes ultimately resides.
“It’s not because Google has a data centre here that the data is going to stay here,” said Alice-Anne Simard, executive director of Nature Québec.
Nature Québec and other groups concerned about the environmental impact of data centres are calling for an independent assessment by BAPE, the Bureau d’audiences publiques sur l’environnement, an independent environmental watchdog agency that advises the Quebec government.
For Whitmore, debating these crucial issues will help determine how the industry develops in Quebec.
“We have to decide now what are going to be the constraints that AI is going to evolve within,” she said. “And it has to be to the benefit of society.”
