Alberta Budget 2025: Data Centre Developer Stakeholder Brief

Executive Summary

Budget 2025 provides data centre developers with a strong infrastructure foundation through the $301M Alberta Broadband Strategy, $93M Digital Accelerator Program, and $698M in Technology and Innovation capital spending. While the budget does not introduce a dedicated data centre incentive program, the combination of connectivity investment, government technology modernization, and Alberta's natural competitive advantages -- cold climate, available land, competitive energy costs -- continues to position the province as an attractive location. Key risks include 15% tariffs on imported IT equipment and rising electricity costs from higher natural gas prices at C$2.50/GJ.

Top 5 Relevant Budget Measures

1. Alberta Broadband Strategy at $301M over three years -- $106M in 2025-26 and $194M in 2026-27, funded through capital grants. This builds the fibre backbone and last-mile connectivity that supports data centre colocation and interconnection.

2. Technology and Innovation capital at $698M over three years -- encompassing broadband, digital accelerator programs, government technology modernization, and critical IT infrastructure. This represents the largest non-transportation capital allocation outside health and education.

Digital Accelerator Program at $93M -- $53M in 2025-26 and $40M in 2026-27, supporting technology adoption across the economy that drives demand for data centre services including cloud computing, managed hosting, and disaster recovery.

Government technology modernization -- including One IMT Enterprise Priorities ($118M), Mainframe Modernization ($22M), and Critical Infrastructure ($67M). Government migration to cloud-based platforms creates direct demand for data centre capacity.

8% personal income tax bracket -- while not sector-specific, the tax cut to $750 per individual on the first $60,000 of income enhances Alberta's talent attraction proposition. Technology workers comparing after-tax income across provinces will find Alberta's combination of no PST and lowest income tax rates compelling.

Risks

Tariff impact on hardware costs. A 15% tariff on goods imported from the U.S. directly affects servers, networking equipment, cooling systems, power distribution units, and other data centre infrastructure. For facilities under construction or in procurement, this can add millions to capital budgets. Supply chain diversification to non-U.S. sources takes time.

Electricity cost trajectory. Natural gas prices rising to C$2.50/GJ and higher increase the cost of Alberta's predominantly gas-fired electricity. Power represents the largest ongoing operating cost for data centres. While Alberta's power pool market has historically delivered competitive pricing, tariff-driven inflation and fuel cost increases create uncertainty.

Absence of dedicated incentive. Unlike some competing jurisdictions that offer specific data centre tax incentives or power rate concessions, Budget 2025 does not include a targeted data centre program. Alberta's general competitive advantages must compensate for the lack of sector-specific incentives.

Workforce competition. The $26.1B capital plan and growing technology sector compete for construction trades and IT professionals. Data centre construction requires electricians, HVAC technicians, and civil contractors. Operations require IT specialists, network engineers, and power management experts. Competition for these workers will be intense.

Trade uncertainty affecting enterprise demand. The broader economic slowdown from tariffs (GDP growth decelerating to 1.8%) could reduce enterprise technology spending, slowing demand growth for data centre capacity in the Alberta market.

Opportunities

Broadband connectivity expansion. The $301M Broadband Strategy builds the connectivity infrastructure that data centres need. New fibre routes and connectivity points in previously underserved areas may open up new site options and customer markets.

Government as anchor tenant. Government technology modernization spending across multiple ministries creates demand for cloud hosting, managed services, and disaster recovery. Alberta-based data centres with government security certifications can serve as anchor tenants.

AI and cloud demand. The broader trend of AI workload growth, enterprise cloud migration, and digital transformation drives sustained demand for data centre capacity. Alberta's cold climate reduces cooling costs, providing a structural advantage for power-intensive AI computing.

Tax competitiveness for talent. The new 8% income tax bracket, combined with no PST and competitive housing costs relative to Toronto and Vancouver, supports recruitment of the technology professionals that data centres need for operations and customer support.

Designated industrial zones. The Environment and Protected Areas ministry is piloting designated industrial zones at $38M over three years. While primarily targeted at industrial operations, these zones may offer streamlined permitting and infrastructure for data centre campuses.

Likely Government Intent

The government views digital infrastructure as an economic diversification enabler. The broadband strategy and technology modernization spending indicate a commitment to building the foundation for a digital economy. While the absence of a dedicated data centre incentive suggests the government has not yet prioritized sector-specific policy, the scale of technology investment and Alberta's natural advantages indicate receptivity to data centre development. The government's emphasis on cloud-based platforms, cyberattack resilience, and modern digital services delivery creates alignment between public sector needs and data centre capacity.

Immediate Questions to Ask Ministries

1. Technology and Innovation: What criteria guide broadband strategy investment decisions, and how can data centre developers coordinate site selection with planned fibre deployment routes?

2. Affordability and Utilities: What is the government's framework for managing electricity pricing for large industrial loads like data centres, and are there provisions for interruptible rate structures?

3. Jobs, Economy and Trade: Is the government considering any investment attraction programs specifically targeting data centre development, similar to initiatives in other provinces?

4. Environment and Protected Areas: Could designated industrial zones accommodate data centre campus development, and what are the permitting advantages?

5. Advanced Education: What technology-focused workforce development programs are planned to support the growing demand for IT professionals in Alberta?

48-Hour Action Checklist

• Model tariff impact on current and planned equipment procurement budgets
• Review electricity cost projections under higher gas price scenarios for operating models
• Map broadband strategy deployment corridors against potential data centre sites
• Contact Technology and Innovation ministry for post-budget briefing on digital infrastructure plans
• Assess government technology modernization RFP pipeline for anchor tenant opportunities
• Brief investors on Alberta budget positioning and competitive advantages
• Identify municipal-level incentive programs that complement provincial budget measures

30-Day Monitoring Checklist

• Track broadband strategy procurement announcements and fibre deployment schedules
• Monitor AESO grid capacity and interconnection queue for generation adequacy signals
• Follow government technology modernization RFP releases across ministries
• Assess competitive landscape as other Canadian provinces announce data centre incentives
• Review workforce availability data for construction trades and IT professionals
• Engage with industry associations on collective advocacy for data centre policy
• Monitor quarterly fiscal updates for changes to technology investment profiles

Suggested Message Frames

Frame 1 -- Digital Economy Foundation: Data centres are the physical infrastructure of the digital economy. Alberta's $301M broadband investment and government technology modernization depend on world-class data centre facilities to house the servers, storage, and networking that power modern services.

Frame 2 -- Investment Attraction: Alberta offers data centre developers a unique combination of cold climate, competitive energy costs, available land, and growing connectivity. Budget 2025 investments in broadband and digital infrastructure strengthen this proposition and attract global technology investment.

Frame 3 -- Economic Diversification: Each data centre creates hundreds of construction jobs and dozens of permanent technical positions. They attract technology companies, support remote work infrastructure, and generate property tax revenue. Data centres are precisely the kind of diversified economic activity Alberta seeks.

Opposition Narratives to Anticipate

"Data centres consume too much power." Critics may argue that data centre electricity demand competes with residential and commercial consumers. Counter with data on economic contribution, job creation, and the opportunity for co-located renewable generation.

"Alberta lacks the technology ecosystem." Some may argue that Alberta's technology sector is too small to support major data centre development. Highlight growing AI, energy technology, and digital services sectors, plus proximity to natural resources for energy-intensive computing.

"Tax advantages benefit out-of-province corporations." The perception that data centres are owned by large technology companies may generate criticism. Emphasize local construction employment, operational jobs, and municipal tax revenue generated by data centre operations.

Data Points to Monitor

• Broadband strategy procurement milestones and fibre deployment schedules
• AESO generation capacity and interconnection queue data
• Government technology modernization RFP releases and cloud migration timelines
• Competing provincial data centre incentive program announcements
• Alberta electricity pool prices and forward price curves
• Construction trade and IT professional labour availability indicators
• Municipal planning approval timelines for data centre developments
• Natural gas price trajectory relative to C$2.50/GJ forecast
• Enterprise technology spending trends in Alberta market