Canada: The Growing Market North of the Border 

Canadian data center market: A Canadian flag flutters prominently before a stunning mountainous landscape with lush green forests and a small town nestled in the valley below.

Montreal has historically been the Canadian data center market hub…the Canadian equivalent of a Tier 1 U.S. market. And for good reason. Its moderate climate is conducive to the use of lower-cost, lower-carbon air side cooling for most of the year. Hydro-Quebec electricity enables data centers to be powered by 99.9% renewable energy at a low cost per kilowatt hour. And the region is rarely affected by natural disasters. With affordable and environmentally friendly power options, total cost of ownership in Montreal is relatively low compared to elsewhere in North America.

Montreal also offers a well-connected fiber infrastructure and easy access to a skilled workforce. Naturally, it emerged as the forerunner for data center development and growth in Canada when Canada passed the Personal Protection and Electronic Documents Act 20 years ago, requiring that all personal data be stored within the country.

Data center development took off in Canada about five years ago when large cloud providers, including AWS, Microsoft, and Google, came on the scene. At that time, enterprise and government data users were mostly managing their own deployments.

Five years in, governments and enterprises are at a crossroads. It’s time for a refresh. And, as is the case in markets across the globe, governments and enterprise-scale companies are opting to move more data and applications to the cloud. Canadian business development groups are unanimously pointing to a massive increase in cloud computing for the country.  

For many applications,  latency requirements mean data centers can’t be located just anywhere; they must be closer to the point of use. These dynamics are prompting a big shift in the Canadian data center landscape. Users need options and geographic diversity.

In the first half of 2021, demand for capacity in Toronto — a major tech and business hub for North America — has nearly eclipsed Montreal. At the same time, these latency restrictions will continue to drive data center deployments in Western Canada with Calgary and Vancouver developing at a rapid clip.

Transitioning to a cloud-first strategy is not achieved overnight. But as business leaders continue to better understand the opportunity, data center growth is expected to increase not only in Montreal, but in Toronto, Calgary and Vancouver. Expect dots on the data center map of Canada to look a lot different in the years ahead.