Alberta announces levy on large data centre projects

Key Takeaways:

• Alberta will introduce a 2% levy on hardware for data centres of 75 MW or more starting Dec. 31, 2026, offset against corporate income taxes once facilities are profitable.
• The province is considering payment-in-lieu-of-tax and deferral programs to provide cost stability during construction and early operation.
• The measure is part of Alberta’s strategy to attract AI infrastructure investment, emphasizing cooling efficiencies, low-cost electricity, and a competitive tax system.

The Whole Story:

Alberta will introduce a 2% levy on computer hardware for large-scale data centres beginning Dec. 31, 2026, a move the province says will ensure the industry contributes fairly while maintaining its competitiveness.

The levy will apply to grid-connected facilities with power capacities of at least 75 megawatts. The province said the measure was developed following a six-week consultation with industry stakeholders.

To avoid additional costs once data centres become profitable, the levy will be fully offset against provincial corporate income taxes.

“Alberta’s government has a duty to ensure Albertans receive a fair deal from data centre investments,” said Nate Glubish, minister of technology and innovation. “This approach strikes a balance that we believe is fair to industry and Albertans, while protecting Alberta’s competitive advantage.”

Treasury Board president and Finance Minister Nate Horner said the government is also considering options to provide more cost stability, including a payment in lieu of taxes program to allow for predictable annual payments, and a deferral program to ease cash-flow pressures during construction and early operations.

“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,” Horner said. “This approach provides stability for businesses while generating new revenue to support Alberta’s future.”

The province said qualifying data centres will be recognized as designated industrial properties, with property values assessed provincially. Land and buildings tied to these facilities will remain subject to municipal taxation, though municipalities will be permitted to offer incentives or deferrals of up to 15 years under the Municipal Government Act.

The new framework follows Alberta’s Artificial Intelligence Data Centre Strategy, launched in December 2024, which aims to position the province as a hub for AI infrastructure. Alberta touts its natural cooling advantages, relatively low-cost power, and tax regime as draws for investors.

According to industry projections cited by the province, the global AI data centre market could top $820 billion by 2030, with capacity demand expected to more than triple. AI alone is forecast to drive a 160% increase in global data centre energy use by the end of the decade.