Demand for computing power is rapidly surging, especially with the growth of Artificial Intelligence, or AI. This hunger for computing power likely means there will be more and larger data centers across Canada. Below, we look at the environmental issues associated with these data centers, including environmental permitting requirements.
Canadian Energy Policy and AI Development
In a recent report in Energy Reporters, they state, “Canada’s recent suspension of clean energy regulations, agreed upon by Prime Minister Mark Carney and Alberta Premier Danielle Smith, paves the way for the development of gas-fired power plants to support large data centers, marking a significant shift in the nation’s energy and economic strategy.” According to the World Economic Forum, as of March 2024, Canada had 336 of the 11,800 global data centers.
As we have covered in several blogs this year, there has been a dramatic shift in federal and provincial environmental policies. The energy policy modifications reflect the global push for more data centers to support computing needs, especially with the anticipated continued growth in AI.
Data Centers
Data centers are buildings that house the infrastructure needed to run computers, including servers, network equipment, and data storage drives. These buildings, on average, range from 20,000 to 100,000 square feet. The trend, however, is to build “hyperscale centers” that can be 1,000,000 square feet or more. Though they have been around since 1945, in the past few years, there has been an explosion in data center development to match the rapid rise of AI (Smithsonian).
Data Center Environmental Demands
Two of the more-discussed requirements to run data centers are energy and water. According to the Government of Canada, data centers currently consume about one percent of the total electricity used in Canada every year. This demand is growing. About half of the energy consumed in a data center is used by computing servers. Another 40 percent goes to cooling these servers.
Data centers will continue to expand globally for the foreseeable future. As they do, so will the demand for energy and water.
In a story on National Public Radio (US), it is stated that a researcher, Jesse Dodge, did some quick calculations on the energy demands emanating from the use of AI. He said, “One query to ChatGPT uses approximately as much electricity as could light one light bulb for about 20 minutes. So, you can imagine with millions of people using something like that every day, that adds up to a really large amount of electricity.”
The article goes on to say that ChatGPT’s daily power usage (a million kilowatts/day) is nearly equal to 180,000 U.S. households.
Water Usage
In the United States, the Environmental and Energy Study Institute (EESI) produced a paper in July 2025: Data Centers and Water Consumption. Some of the findings in that paper include:
- Large data centers can consume 1.8 billion gallons of water/year*
- Medium data centers can consume 110 million gallons of water/year*
- Collectively, the 5,426 data centers in the US consume 163.7 billion gallons of water/year
*for cooling purposes
A study by Purdue University found that an average data center will consume about 300,000 gallons of water each day.
Put another way, each 100-word AI prompt uses approximately 519 milliliters of water. Over billions of AI users across the globe, this simple AI-generated response results in massive water use.
80% of the water, which is typically fresh water used by the data centers, evaporates. The remaining 20% goes to local waste treatment plants.
In the US, 56% of the electricity used to power data centers comes from fossil fuel sources, which, in turn, use large quantities of water (steam to turn turbines).
The production of chips is another source of water consumption. In addition, AI requires tens of thousands of servers, each with multiple chips. “A single chip installed in a data center has already consumed thousands of gallons of water by the time it reaches the site” (EESI).
Potential Environmental Permitting Requirements in Ontario
Beyond a typical Phase I Environmental Site Assessment and perhaps a Records of Site Condition, some other considerations for data centers include the following.
Water Taking: You must have a permit if you plan to take 50,000+ litres of water in a day from the environment (with certain exemptions). See our Permit to Take Water pre-recorded webinar.
Noise: Equipment that emits noise into the natural environment is only permitted to do so under the terms and conditions of an Environmental Compliance Approval.
Greenhouse gas emissions: See Reporting Greenhouse Gas Emissions
Some environmental groups have expressed concern about per- and polyfluoroalkyl substances (PFAS) in data centers. PFAS are used in making semiconductors, which are clearly used in computer servers. The disposal of chips has specific recycling or waste disposal requirements. Unless future studies prove otherwise, this does not seem to be a significant concern.
Also see the article by the law firm Miller Thompson, AI’s Environmental Footprint: Top Compliance Risks Canadian Companies Should Consider.
Data centers will continue to expand globally for the foreseeable future. As they do, so will the demand for energy and water, both of which are essential for all parts of the economy, agriculture, and society. This is an issue to closely monitor in the coming months and years.
Environmental Assistance
For more information or for assistance with an environmental issue, contact Christopher Paré, P.Geo., at 519-948-7300, Ext. 114.
Alan Hahn drafted this blog. Alan has an undergraduate degree in Environmental Studies and completed a graduate program in Environmental Management. He has worked in environmental management for more than 45 years. He has written hundreds of blogs and articles. His published work includes HazMat Magazine, BizX Magazine, Michigan Lawyers Weekly, GreenStone Partners, Manure Manager Magazine, and Progressive Dairy.
Christopher Paré, P.Geo, reviewed this blog. Chris is a senior geoscientist and manager of Dragun’s Windsor, Ontario, office. Chris has more than 30 years of experience on projects ranging from environmental site assessments (Phase One/Two ESA), excess soils, remedial investigations, soil and groundwater remediation, Permits to Take Water, Records of Site Conditions, vapour intrusion, and site decommissioning. Chris is a frequent speaker, author, and expert witness. See Chris’ bio.
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