Quebec Province Data Center Market

Overview

Quebec is the second-largest data centre market in Canada, after Ontario. Montreal holds most of the province's colocation and cloud capacity, and Quebec City forms a second hub. Hydro-Québec's hydropower gives operators clean, low-cost electricity, and the cold climate cuts cooling costs. Since 2023 the provincial government has decided which large projects get power. AI demand now competes with industry and electrification for a limited supply.

History

Montreal's commercial data centre industry grew out of local hosting firms and downtown carrier hotels. In the 2000s Canix Colo built colocation suites in downtown towers, including the carrier hotel at 1250 René-Lévesque Ouest. iWeb, founded in 1996, built its own Montreal data centres. INAP bought iWeb in 2013, and Leaseweb bought it in 2021. Cologix entered the market in 2011 by acquiring Canix Colo. In 2018 Cologix bought Colo-D and its large data centres in Drummondville and Longueuil.

Cheap power then drew larger operators. OVHcloud, then called OVH, opened its first North American data centre in 2012, in a former aluminium smelter beside the Beauharnois dam. AWS opened its Canada Central cloud region in Montreal in 2016. Microsoft opened its Canada East region in Quebec City the same year. Google followed in Montreal in 2018, and Oracle in 2020. eStruxture launched in Montreal in 2017 and bought Aptum's Canadian data centres in 2021. Vantage entered in 2019 by buying Vidéotron's 4Degrés data centres in Montreal and Quebec City. In 2020 Vantage bought Hypertec's hyperscale data centres in Pointe-Claire, and Equinix bought Bell's data centres.

Bitcoin miners arrived in 2017 and 2018, drawn by cheap power in small towns. Their requests flooded Hydro-Québec, which paused new crypto connections in 2018. In 2019 the Régie de l'énergie created a separate crypto rate class and a dedicated 300 MW block for new miners. Bitfarms, founded in 2017, grew to eight mining sites across the province. In 2023 the government took control of every large new connection. Hydro-Québec has since refused power to several large campus proposals.

The Market Today

Montreal holds most of Quebec's capacity. Cologix runs the largest colocation footprint, with about a dozen facilities from downtown to the South Shore. Vantage, eStruxture, Equinix, Leaseweb, Centersquare and Enovum also operate in the metro. AWS, Google and Oracle run cloud regions there, and AWS has built its own data centre in Varennes. OVHcloud runs a large hosting campus at Beauharnois. In late 2025 Cerebras opened an AI inference data centre in Saint-Jérôme, north of the city. Google owns land at Beauharnois for a campus of its own, but it has no power approval yet.

Quebec City is the second hub. Microsoft has run its Canada East cloud region there since 2016. Vantage runs a multi-building campus in the city and plans another building for 2027. Across the river in Lévis, QScale has run a liquid-cooled campus for AI and high-performance computing since 2023. Goldman Sachs Alternatives bought QScale in 2026, and QScale plans a second building at Lévis.

Across the rest of the province, much of the capacity sits in bitcoin mines. Keel Infrastructure, formerly Bitfarms, runs mines in the Eastern Townships, Montérégie and Baie-Comeau. TELUS opened a Sovereign AI Factory in Rimouski in 2025. Equinix serves the Ottawa market from its OT1 data centre in Gatineau, and Cologix runs a large site in Drummondville.

Advantages

• Clean, low-cost power. Hydropower supplies almost all of Quebec's electricity. Data centres pay about C$0.068 per kWh on average, among the lowest rates in North America.
• Low-carbon credentials. Buyers with emissions targets get near-zero-carbon power without on-site generation or offsets.
• Cold climate. Long winters give most sites free cooling for much of the year.
• AI talent. Montreal hosts Mila, the Quebec AI institute founded by Yoshua Bengio, and a deep pool of AI researchers.
• Data residency. Quebec's privacy law, Law 25, requires an assessment before personal information leaves the province. The rule favours hosting regulated data inside the province.

Challenges

• Power allocation. Since 2023, every new load of 5 MW or more needs provincial approval. Only one data centre expansion has won a published block since then. Data centre requests waiting for review total about 2,500 MW.
• Rising rates. In 2026 Hydro-Québec proposed a data centre rate of about C$0.13 per kWh, nearly double today's average. Crypto miners face a rate near C$0.195. The Régie de l'énergie holds hearings through late 2026.
• Tight supply. Hydro-Québec plans 8,000 to 9,000 MW of new capacity by 2035 to meet its own forecasts. Industry, electrification and data centres compete for that power.
• Use-it-or-lose-it terms. Since April 2025, customers on the large-power rate pay a premium when their peak demand stays below 60% of reserved capacity.
• Land and language. Agricultural zoning covers much of the land around Montreal. Google needed a 2021 government decree to take its Beauharnois site out of the agricultural zone. The Charter of the French Language also requires businesses to operate in French.

Trends

• AI replaces crypto. Miners are converting their sites to AI and high-performance computing. Keel Infrastructure plans to consolidate its Sherbrooke mines into one AI campus. Since September 2026, a crypto site of 50 kW or more needs provincial approval to switch to data centre use.
• Growth inside existing allocations. With few new blocks granted, operators build out power they secured earlier. QScale's second Lévis building draws on its existing blocks.
• New owners. Global investors are buying Quebec platforms. Bit Digital bought Enovum in 2024, Centersquare bought a Montreal data centre in 2025, and Goldman Sachs Alternatives bought QScale in 2026.
• Sovereign AI. Carriers and governments want compute under Canadian control. TELUS markets its Rimouski AI factory as sovereign Canadian compute.

Power and Policy

Hydro-Québec, a Crown corporation, generates and distributes almost all of Quebec's electricity. Several municipal networks, including Sherbrooke, Magog and Baie-Comeau, buy power from Hydro-Québec and resell it locally. The Régie de l'énergie, Quebec's energy regulator, sets Hydro-Québec's rates. Bill 2, adopted in February 2023, requires government approval before any new load of 5 MW or more connects. The Ministère de l'Économie, de l'Innovation et de l'Énergie (MEIE) reviews each request case by case, and Quebec runs no auction for data centre power. Hydro-Québec's 2026 rate case would create a separate rate for data centres of 5 MW or more.