Province puts levy on data centre hardware

By Lethbridge Herald on September 2, 2025.

Al Beeber
Lethbridge Herald

The provincial government is introducing a two per cent levy at the end of 2026 on computer hardware that will apply to grid-connected data centres of at least 75 megawatts.

The province says the new framework was shaped after six weeks of consultation with industry stakeholders and “reflects Alberta’s commitment to fairness, competitiveness and long-term prosperity.”

After a data centre becomes profitable and starts paying corporate income tax in the province, the levy won’t result in additional tax  burden, says the government. The levy comes into effect on Dec. 31 of next year.

Data centres of 75 megawatts or greater will be recognized formally as designated industrial properties with property values assessed by the province.

The land and buildings associated with the centres are subject to  municipal taxation. Property tax incentives or deferrals up to 15 years may be offered by municipalities under provisions of the Municipal Government Act.

“This framework builds on the Alberta Artificial Intelligence Data Centre Strategy, introduced in December 2024, which positions Alberta as a destination of choice for AI infrastructure,” says the province in a Wednesday statement.

“After working closely with industry we’re introducing a fair, predictable levy that ensures data centres pay their share for the  infrastructure and services that support them. This approach provides  stability for businesses while generating new revenue to support Alberta’s future,” says Nate Horner, president of of Treasury Board and minister of finance.

By the year 2030, the AI data centre market globally is expected to exceed $820 million and demand for capacity could triple by that year, says a report by technology firm McKinsey & Company which says AI is the key driver in demand for data centre capacity.

According to McKinsey & Company, while a decade ago a 30 MW centre was considered to be large, facilities of 200 MW are now seen as normal.

“The driving force for this is the computing power required for AI workloads, which, in turn, bumps up energy consumption,” says a 2024 report by McKinsey & Company.