Governments in Canada and Australia Target Data Centre Growth

Governments in Canada and Australia are introducing divergent regulatory measures to address the environmental impact of AI and data centre expansion. In Canada, the Municipality of North Cowichan unanimously passed a motion on September 2, 2026, to develop a zoning bylaw amendment and policy that would legally prohibit data centres within the municipality. Introduced by Councillor Chris Istace, the measure seeks to protect farmland and the environment from noise pollution and the high water and energy demands of these facilities.

Simultaneously, the Australian Federal Government is developing regulations to mandate energy efficiency and water minimization for AI data centres. However, 25 projects already approved or under construction will be exempt from these new rules. These exempt centres are projected to consume nearly twice the power of all currently operating data centres in Australia. NextDC is currently building the country's largest facility in Horsley Park, Sydney.

Political pressure for stricter controls is mounting in both regions. In Australia, Senator Sarah Hanson-Young and the Greens are calling for a moratorium on new developments until regulations are finalized. A Parliamentary Inquiry into Artificial Intelligence and Data Centres is expected to report its findings in November. In Canada, local advocate Peter W. Rusland has urged provincial and federal leaders in Ottawa to prioritize green-energy alternatives over AI infrastructure expansion.