As British Columbia accelerates efforts to attract data centres to the province, a proposed facility in Nanaimo is drawing scrutiny from environmental advocates who say the water and power demands of the digital economy are colliding with climate reality.
The project, planned for a 5.75-acre site on East Wellington Road, would introduce a modular, high-tech data centre into the semi-rural North Jingle Pot area, which was recently rezoned for industrial use. Critics warn that its water consumption, electricity needs, and cumulative ecological footprint raise serious questions – particularly in a region already experiencing drought conditions, declining snowpack, and grid vulnerability.
Rapid expansion of data centres
Data centres are the physical backbone of the digital world massive bunkers housing servers that store, process, and transmit enormous volumes of information. Sometimes described by the industry as “carrier hotels,” they host networks of data streams that power everything from banking and health records to social media and artificial intelligence.
Over the past decade, the energy demand of data centres has increased dramatically. Rack density – a measure of how much power is required to run servers – has risen from roughly five kilowatts per rack to as much as 100 kilowatts, driven largely by AI and accelerated computing.
According to the International Energy Agency, data centres already account for about 1.5% of global electricity consumption – roughly 415 terawatt-hours annually – and that figure is projected to more than double by 2030. The agency estimates that data centres will be the single largest driver of new electricity demand worldwide over the next five years.
Data centres are the physical backbone of the digital world
Canada has become an increasingly attractive destination for this infrastructure. Cooler average temperatures reduce cooling costs, hydroelectricity is marketed as low-carbon, and federal privacy protections under the Personal Information Protection and Electronic Documents Act appeal to companies seeking alternatives to US surveillance regimes. British Columbia now hosts 26 data centres, most concentrated in Metro Vancouver. Nanaimo’s proposed facility is part of this broader expansion.
The Nanaimo proposal
The Nanaimo data centre is being developed by Nanaimo-based Townsite Planning, Inc. on behalf of the landowner, 2779022 Ontario Inc., which operates under the business name Maplecolo. The East Wellington site was rezoned in 2023 to High-Tech Industrial (I-3), with “data centre” added as a site-specific use under Nanaimo’s Official Community Plan.
The City of Nanaimo says the centre won’t be used for artificial intelligence. Maplecolo markets its communication services as “quantum-safe,” using cryptographic systems designed to protect sensitive information from future cyber threats. Industry leaders frequently describe such facilities in military terms – “mission critical” infrastructure requiring constant power, security, and redundancy.
The project would be built in phases, with up to ten modular units constructed over time, depending on market demand and electricity supply. While it has not yet received a development permit, environmental advocates say the scale and implications of the project have not been adequately examined in the context of Nanaimo’s water and energy constraints.
Water use in a changing climate
At full build-out, the data centre is expected to consume between 55,000 and 69,000 litres of potable water per day, primarily for cooling equipment.
The City of Nanaimo has sought to contextualize this figure, noting that it represents approximately 0.19% of the city’s total daily water use and about one per cent of all commercial and industrial consumption. Staff compare it to other local water users: a shopping mall can use roughly 100,000 litres per day, while a food processing facility may consume more than 80,000.
The City of Nanaimo says the centre won’t be used for artificial intelligence.
But environmental groups argue that such comparisons miss the point.
Nanaimo’s drinking water comes from the South Nanaimo River watershed, whose headwaters originate on the eastern slopes of Mount Hooper in the Island Mountain Range, and the water supply is highly dependent on consistent precipitation and mountain snowpack.
Those conditions are becoming less reliable. In recent years, reduced snowpack and longer dry seasons – exacerbated by logging in the watershed – have heightened concerns about summer water scarcity.
Nature Nanaimo, a local environmental organization, warns that industrial water extraction for cooling could reduce flows into the Nanaimo River, with downstream impacts on salmon habitat, water quality, and public access. Wetland disruption from land clearing could also increase erosion and runoff, degrading the watershed’s ecological integrity.
“Wetlands destruction carries another cost in flooding, the loss of animal habitat, and declining ecological diversity,” the group said in a submission to the city. The developer has responded by stating that the facility will use a re-circulating, closed-loop cooling system designed to minimize water loss, replenishing only what evaporates. City staff say they are working with the proponent to ensure the design aligns with Nanaimo’s conservation objectives.
Still, critics argue that even “efficient” systems add stress to already constrained ecosystems – particularly when viewed cumulatively. They maintain that current levels of resilience may not stand up to future climate scenarios, and that decisions made now will shape how communities absorb climate shocks in decades to come.
Power demand and public cost
Beyond water, the project’s electricity requirements have raised concerns about grid reliability and public cost.
Data centres require uninterrupted power and must receive provincial approval to connect to BC Hydro’s transmission grid. That approval is not guaranteed. BC Hydro plans to launch a bid system for data centres in January 2026, which will require projects to compete for the ability to connect to the grid.
If approved, the Nanaimo facility would qualify for BC Hydro’s Innovation Rate, a reduced industrial electricity price available to customers consuming more than 70 gigawatt-hours annually. Under the program, qualifying data centres receive electricity discounts of up to 20% for the first five years.
Staff raised questions about noise, lighting, fencing, and habitat disruption.
Environmental advocates in BC question why energy-intensive private infrastructure should receive discounted power at a time when the Province is warning of future electricity shortages and urging households to conserve.
Data centres are designed to operate without interruption, relying on diesel backup generators during outages – a feature that raises additional concerns about emissions and local air quality.
Habitat, noise, and impact
During a development permit review meeting, city The developer committed to protecting 20% of existing trees and to engaging an acoustical engineer to reduce projected noise levels by 4-5 decibels.
For critics, these concessions do not address the larger issue: the normalization of energy- and water-intensive infrastructure in ecologically sensitive areas, approved incrementally rather than assessed as a whole.
“We’re dealing with enormous cumulative impacts in our territory,” one regional environmental advocate said during a public hearing. “When you add energy-intensive projects on top of climate stress, the risks compound.”
When you add energy-intensive projects on top of climate stress, the risks compound.
Nanaimo’s data centre debate arrives as the Province grapples with how to balance economic development, climate commitments, and infrastructure limits. While BC has permanently banned cryptocurrency mining from connecting to the provincial grid, other forms of high-intensity computing continue to receive policy support.
The Nanaimo project represents relatively small resource beans compared to the $70-billion data centre celebrity Kevin O’Leary has proposed near Grand Prairie, Alberta. Named “Wonder Valley,” the project would be the largest data centre in the world. Last January, the Sturgeon Lake Cree Nation submitted a cease-and-desist letter to Alberta Premier Danielle Smith, arguing they had not been consulted about the proposed use in its traditional territory, where the centre is slated for development.
In the letter, they state they only learned about the Province’s support for the proposal through media statements Smith and O’Leary made jointly on Fox News. Primary concerns for SLCN are water extraction from its primary water source, the Smoky River. The Wonder Valley Fact Sheet says its 24 million m3 yearly need for water will only use 0.2% of the river’s total annual flow.
AI expert David Rolnick at McGill University told CTV news that water is not the only concern with the project – the Wonder Valley centre would raise Canada’s total GHG emissions by 5%.
Under former Prime Minister Justin Trudeau, power generators – the kind needed to fuel large-scale data centres – were required to have net-zero emissions by 2050. Last November, Mark Carney signed an agreement with Danielle Smith that suspends the federal government’s clean electricity regulations, opening up the potential for data centers to expand the use of natural gas, coal, and nuclear reactors to power them.
As BC woos big tech infrastructure, Nanaimo’s experience may serve as an early test of whether the province is prepared to reckon honestly with the physical costs of the digital economy – or whether those costs will continue to be absorbed quietly by rivers, forests, and public utilities.
Sidney Coles, PhD, is a journalist and human rights advocate, and lives in Victoria on the traditional territory of the lək̓ʷəŋən people.
