Federal Adviser Says Data Centres ‘Provide Markets’ for Gas

[Editor’s note: This story is being published in collaboration with DeSmog , a global climate investigations outlet.]

The artificial intelligence strategy announced by Prime Minister Mark Carney in early June promised to create hundreds of thousands of new jobs, boost Canadian productivity and help domestic AI companies, with “a clear goal of improving the lives of all Canadians,” according to the prime minister.

But a top advisory body to Carney’s Liberal government has also quietly identified another policy goal that wasn’t mentioned in the hotly anticipated “ AI for All” road map . One of the top “public policy benefits to Canada” of constructing a national network of data centres is creating new markets for Canadian natural gas producers.

An internal Privy Council document from 2025 explained that the build-out of vast electricity-consuming data centres across the country can “provide markets for Canadian energy” and lead to “net new energy resources.”

The document, entitled “Investments in Canadian Data Centres,” was obtained by Greenpeace Canada and shared with DeSmog and The Tyee following a release under the Access to Information Act. It was prepared for the clerk of the Privy Council, one of the top advisers to Carney.

A list of proposed data centres, which provide the computing power for AI, gives clarity on what kind of energy resources the federal government hopes to grow. Massive data centres proposed for Alberta, including the Kevin O’Leary-backed Wonder Valley project , will have their energy needs “supplied by natural gas,” the Privy Council document reads.

Carney could have insisted as part of his AI strategy that data centres be powered by renewable energy, said Keith Stewart, a senior energy strategist with Greenpeace Canada. But Stewart said the document shows that the federal government views AI as part of a fossil fuel growth strategy.

"This makes it clear that one of the main reasons that the Carney government wants to expand AI data centres is that so Big Oil can sell more gas," Stewart said.

The Privy Council Office didn’t answer detailed questions by publishing time.

Doubts about net zero

A key goal of Carney’s AI strategy is for 60 per cent of businesses to adopt AI by 2034, up from about 12 per cent currently. The Liberal government plans to support that goal with a $700-million fund to boost AI use among small and medium-sized businesses.

All of that AI use will require a vast expansion of computing power in Canada. And the data centres that provide that power in turn require huge amounts of electricity. That has attracted the interest of Canada’s fossil fuel industry, which for years has predicted that data centres could drive up domestic demand for gas .

Privy Council Clerk Michael Sabia last year met with the Calgary-based company TC Energy, which operates a large network of natural gas pipelines across North America and owns gas-fired power plants.

According to a separate backgrounder prepared for Innovation, Science and Economic Development Canada, also obtained by Greenpeace, Sabia and TC Energy discussed how proposed data centres in Alberta could connect to the company’s natural gas pipeline network. “Energy availability and connection continues to be a key rate limiter in how quickly Canada will be able to scale its AI infrastructure,” it reads.

But the document acknowledged powering data centres with gas could impact Canada’s progress towards climate goals. “[Natural Resources Canada] officials note that Federal responses to potential proposals will need to balance federal desire to reach net-zero emissions with provincial desires to attract investment and stimulate economic growth,” it reads.

TC Energy didn’t respond to questions about the meeting.

‘Gargantuan’ gas projects

The AI data centre proposals in the Privy Council document included three projects, two of which are located in B.C. and one in Quebec. All would be powered by hydroelectricity. These are relatively small projects, each requiring less than 100 megawatts of electricity.

Projects proposed for Alberta are massive in comparison. O’Leary’s Wonder Valley data centre park would require 7.5 gigawatts of energy, all of it supplied by natural gas. That’s potentially enough energy to power more than 6.5 million homes.

Wonder Valley is a “gargantuan” proposal that would involve constructing one of the 10 biggest gas plants proposed right now in the world, according to Norway-based energy and climate analyst Ketan Joshi. A separate Gryphon Digital proposal in Alberta meanwhile requires four gigawatts of gas-powered energy, while the Beacon AI project is proposing two gigawatts worth of gas, the document notes.

Natural gas is plentiful and cheap in Alberta, said Werner Antweiler, an economics professor at the University of British Columbia’s Sauder School of Business.

“It's coming out of the ground, it's not transported anywhere,” Antweiler said. “So you don't have to pay for the pipelines —…