2025
Global Data Center Market Report
Regional Market Overviews
Canada
Canada’s data center market is rapidly growing, driven by increasing demand for cloud services, digital transformation, and data storage needs across industries. With its stable political environment, strong infrastructure, and cooler climate for energy-efficient operations, Canada is becoming a favoured destination for data center investments. Additionally, Canada is emerging as a viable alternative to the increasingly saturated and expensive US market (Research and Markets, 2024) (Green Street News, 2024) (ENCOR Advisors, 2024).
As of 2024, Canada’s data center market had reached a total IT power capacity of 750.0MW, driven by the increasing adoption of cloud computing, the widespread use of Internet of Things (IoT) devices, and the growing importance of big data analytics (ENCOR Advisors, 2024).
Toronto is the leading data center hub in Canada, accounting for c.45% or 335.0MW of the nation’s total installed capacity. Toronto’s prominence stems from its status as a major financial hub and a vibrant tech ecosystem, making it a prime location for data center operations (Cushman & Wakefield, 2024) (StartupBlink, 2024) (Equinix, 2023).
GDP (Current Prices) USD (2023) | 2,142 Bn |
Projected Average GDP Growth (2024-2028) | 1.9% |
10-year Govt Bond Yield (12-month rolling average) | 3.3% |
Country Credit Rating | AAA |
Renewable Energy Share | 9% |
Data Center Capacity (Q1 2024) | 750MW |
Note: Renewable Energy Share excludes hydro-power
Market Dynamics and Growth Factors
Canada’s low population density of 4.4 people per km² and expansive territory, being the second largest country globally, provide key advantages for the data center market. The abundance of land is ideal for constructing large-scale data centers, making it particularly attractive to hyperscalers that require significant space for their operations (Green Street News, 2024) (ENCOR Advisors, 2024) (Forbes India, 2024) (Statistics Times, 2024).
In addition, Canada’s relatively low electricity prices further enhance its appeal to data center developers. As of June 2024, residential electricity costs were $0.117/kWh, and business rates were $0.099/kWh, both below the global average. Again, these lower energy costs are especially beneficial for hyperscalers, where power consumption is a significant operational expense (Global Petrol Prices, 2024).
Canada’s growing renewable energy capacity is another key factor attracting data center operators, especially those focused on sustainability. By the end of 2023, the country had 22.9GW of installed wind and solar capacity, reflecting an 11.4% growth from 2022 (IRENA Electricty Statistics, 2024). This commitment to expanding green energy helps data centers minimise their carbon emissions. Provinces such as Ontario, Alberta, and Quebec, which hold the largest share of renewable capacity, are also experiencing substantial data center growth (Canadian Renewable Energy Association (CanREA), 2024).
The rapid growth of Canada’s cloud computing market is driving increased demand for data center services due to the need for greater data generation and storage. Statista forecasts the Canadian public cloud market to reach $19.6 Bn by 2025 and sustain strong growth, reaching $38.2 Bn by 2029 at a CAGR of 18.1% (Statista, 2024).
At the same time, the deployment of 5G networks is reshaping Canada’s digital infrastructure. Public and private investments, including C$470.0 Mn ($352.0 Mn) from the Canadian government and Ericsson, are advancing 5G and future 6G technologies (Ericsson, 2023). Reflecting this trend, Japanese telecommunications operator KDDI’s acquisition of Allied Properties REIT’s three carrier-neutral urban data centers for C$1.4 Bn positions the company to provide the critical infrastructure needed to support 5G’s enhanced network capabilities. These developments are closely tied to the growing data center market, driven by the expansion of cloud services and the rise of 5G technology (Global News, 2024) (Borden Ladner Gervais LLP, 2023) (Data Center Dynamics, 2023).
The combination of AI advancements, a thriving startup ecosystem, and strong government initiatives is creating a favourable environment for data center investments in Canada (StartupBlink, 2024). According to Stanford University, Canada’s AI sector saw significant growth from 2013 to 2023, with 397 new AI companies receiving $10.6 Bn in private investment (Stanford University, 2024). Between 2022 and 2023 alone, a total of C$2.6 Bn ($1.9 Bn) was invested in AI research, while venture capital funding hit C$8.6 Bn ($6.4 Bn) (Deloitte, 2023). Additionally, in June 2023, the Canadian government invested C$124 Mn ($92.8 Mn) in the Université de Montréal through the Canada First Research Excellence Fund (CFREF) to support responsible AI development (Government of Canada, 2023). Additionally, in November 2024, the Canadian government introduced the Canadian Artificial Intelligence Safety Institute (CAISI) to enhance the country’s ability to address AI safety risks. This initiative reinforces Canada’s position as a leader in the safe and responsible development and adoption of AI technologies. CAISI is part of a broader $2.4 Bn investment outlined in Budget 2024, aimed at supporting researchers and businesses in advancing AI innovation while ensuring responsible implementation (Government of Canada, 2024).
To further accelerate AI-driven data center growth, Canada’s federal government is also exploring a $15.0 Bn incentive program to encourage domestic pension funds to invest in AI data centers powered by green energy. This proposal, currently under consultation with major pension funds, aims to meet AI’s surging energy demands while advancing the country’s clean energy transition (ESG News, 2024).
Toronto’s status as a leading financial hub plays a crucial role in Canada’s data center market, driving strong demand for data center services. Financial institutions require advanced infrastructure to handle high-frequency trading, real-time data analytics, and secure data transfers, all of which contribute to the growth of the data center industry. Equinix’s ‘Global Interconnection Index (GXI) 2024’ forecasts Toronto to be one of the fastest-growing edge metros in the Americas, with interconnection bandwidth expected to grow at 40.0% CAGR from 2022 to 2026, reaching 320 Tbps. This growth strengthens the city’s capacity for low-latency applications, critical for financial operations like trading and real-time analytics (Equinix, 2023) (Equinix, 2024).
Source: Cushman & Wakefield; ENCOR Advisors
While Toronto has been Canada’s primary data center hub, Montreal is quickly emerging as a major player. As of H1 2024, it had 169.0MW of data center capacity (22.5% market share) with 30.0MW under construction, driven by key operators and the benefit of low-cost hydroelectric power (Cushman & Wakefield, 2024). Montreal’s strong telecommunications and aerospace sectors, along with the fastest- growing interconnection bandwidth (43.0% CAGR from 2022-2026, reaching 124 Tbps by 2026), position it as a significant digital hub (Equinix, 2023) (Equinix, 2024). Its strategic location also provides low-latency access to both North American and European markets, which is ideal for data center operations (ENCOR Advisors, 2024) (Equinix, 2023).
The Canadian data center market is fragmented, with the top five companies accounting for 33.5% of the total capacity. Key players in this space include Beanfield Technologies Inc. (Beanfield Metroconnect), Cyxtera Technologies, Digital Realty Trust Inc., Equinix Inc., and Sungard Availability Services LP (Mordor Intelligence, 2023). The hyperscale market is led by major global cloud service providers like Microsoft, Oracle, Google, Amazon Web Services, and Tencent, driven by the growing adoption of cloud computing and AI infrastructure. The colocation market is primarily dominated by global providers such as Equinix, Cologix, Digital Realty, STACK Infrastructure, and Vantage Data Centers, along with local players like eStruxture Data Centers and Urbacon Data Center Solutions, which are capitalizing on the rising demand for 5G and digital infrastructure (Arizton, 2024).
Policy Regulation
Data centers in Canada must comply with standards such as NIST (National Institute of Standards and Technology), PIPEDA (Personal Information Protection and Electronic Documents Act), and ISO 27001. PIPEDA’s data sovereignty requirements complicate cross-border data transfers, prompting a rise in demand for data center operations outside traditional hubs like Toronto, Montreal, and Vancouver. Companies are increasingly establishing data centers in diverse locations across Canada to adhere to local regulations and reduce latency (Equinix, 2023) (Enzuzo, 2023). The government’s cloud-first strategy, aimed at keeping citizens’ data within national borders, prioritises local data center development. This strategy ensures the availability of major public cloud services in the country. In addition to federal regulations, provinces like Alberta, British Columbia, and Quebec have their own privacy laws similar to PIPEDA (Zoho Corporation, 2024).
NIST, a non-federal US government agency, develops security standards and guidelines covering data center infrastructure as well as IT and supporting applications. Organisations that align their data center operations with NIST security standards can have greater confidence in the efficiency and security of their critical business data that fosters trust among clients and stakeholders (Security Engineered Machinery, 2023). ISO 27001 is the internationally recognised best practice framework for an Information Security Management System (ISMS). An ISO 27001-certified data center demonstrates robust technical measures for data protection, risk management, and effective response to evolving security challenges (Zoho Corporation, 2024).
The Canadian Net-Zero Emissions Accountability Act and the 2030 Emissions Reduction Plan, along with provincial carbon pricing policies, are driving significant changes in the data center industry. Data centers must innovate in climate data tracking, adopt more renewable energy sources, and enhance energy efficiency to comply with regulations and meet their sustainability goals (Techerati, 2023).
The Canadian government’s emphasis on net- zero energy-ready buildings and retrofitting codes, along with broader energy efficiency measures, has direct implications for the development of data centers. By controlling energy costs, adopting low-carbon technologies, and upgrading to meet performance-based codes, data centers not only comply with regulatory requirements but also enhance their operational efficiency and sustainability (Minister of Environment and Climate Change, 2022) (Ministry of Environment and Climate Change, 2024). By leveraging funding programs like the C$200.0 Mn ($149.6 Mn) Deep Retrofit Accelerator and the Canada Infrastructure Bank’s (CIB) C$2.0 Bn ($1.5 Bn) Growth Plan for retrofits, developers can navigate these challenges and support Canada’s climate objectives (Minister of Environment and Climate Change, 2022) (Ministry of Environment and Climate Change, 2024) (Natural Resources Canada, 2024).
Outlook
The Canadian data center market is expected to grow substantially, with revenue projected to grow annually by 5.7% from $8.5 Bn in 2025 to $10.6 Bn by 2029. Investments are projected to expand at a CAGR of 10.3% between 2023-2029 and reach $9.0 Bn by 2029, fueled by increasing demand for digital infrastructure, major cloud provider contributions, and technological advancements (Statista, 2024) (ENCOR Advisors, 2024). Among notable developments, Microsoft announced a $500.0 Mn investment to expand AI and cloud computing infrastructure, while Amazon plans to invest C$24.8 Bn ($18.6 Bn) by 2037 to develop cloud regions in Canada (Microsoft, 2023) (AWS, 2023). The growth of the Canadian data center market is drawing considerable interest from investment firms and asset management companies, leading to major acquisitions and investments. In January 2024, Brookfield Corporation’s $775.0 Mn acquisition of global data center provider Cyxtera, marked a strategic move to expand capacity and leverage existing infrastructure for future growth (Data Center Dynamics, 2024). Similarly, Fengate’s record-setting C$1.8 Bn ($1.3 Bn) investment in eStruxture Data Centers, a Canadian provider of colocation, cloud, and network infrastructure solutions, in June 2024 aims to boost facility expansions and support hyperscale development (Real Estate News EXchange, 2024). LIUNA’s Pension Fund of Central and Eastern Canada participated in Fengate’s investment in eStruxture backed by a group of institutional secondary investors. This consortium is co-led by Partners Group, a global private markets firm, and Pantheon, a specialist in global private markets and secondaries (Daily Commercial News, 2024).