Quebec: Yes to data centres, but they’ll have to pay more for electricity

The Legault government has quietly opened the door to growth in data centres in the province, but these will have to pay more for their electricity than other industrial customers. 

Two decrees published on Jan. 28 in the Quebec Official Gazette and which went unnoticed, ask the Energy Board to create two new categories of electricity consumers, one grouping data centres, the other blockchains intended for cryptocurrency.

In the case of data centres, Quebec is asking the Régie to implement a rate that “reflects the cost of new supplies, rather than the average cost of supplies.” In other words, a rate based on the cost of new supplies rather than the current average cost of production would allow Hydro-Québec to partially recoup the massive investments planned to increase its electricity production. 

Digital sovereignty

Outgoing Premier François Legault makes no secret of his interest in developing data centres, even though they are very energy-intensive and Hydro-Québec is no longer operating at a surplus. His goal is to develop Quebec’s digital sovereignty in a context where entrusting the management of Quebecers’ data to American companies has become riskier. Legault is not ruling out the arrival of new data centres from American giants like Google, especially if these firms bring in higher revenue for the province.

Legault argued during the presentation of his government’s economic strategy last fall that Quebec’s expertise in artificial intelligence (AI), an extremely energy-intensive field, should be based on local data centres. The premier also expressed concern about external control over Quebec citizens’ data, particularly in the context of the digitization of government services. 

The interest of data center companies in Quebec’s green energy is well known, and Legault maintains that they are willing to pay the price. The industrial rate, or Rate L, is currently 3.7 cents per kilowatt-hour (kWh), but rates as high as 15 cents per kWh have been mentioned for data centers. The decree provides no indication of the rate that would be charged to data centers.

Strong growth expected

This decree also provides for the creation of a “mechanism promoting consistency between demand and actual power needs” to allow Hydro-Québec to make optimal use of its available power and “to avoid or postpone significant investments in the electricity transmission and distribution network.” 

Last November, Radio-Canada revealed that Hydro-Québec, which had planned to supply 664 megawatts of electricity to data centres within ten years, had increased this forecast by 66%, to 1102 megawatts per year by 2035, afte Legault’s announcement. 

The allocation of large blocks of electricity has been criticized by many business players, particularly in the industrial sector where companies struggle to obtain blocks of electricity to start or expand their businesses. 

Data centers do not create many jobs, but they are proving indispensable in the new digital economy.

Discourage cryptocurrency mining

The situation is quite different with cryptocurrencies: the other decree indicates, in veiled terms, that an even higher fee is intended for this activity, the clear objective being to discourage it. It states that “the use of cryptography applied to blockchains for cryptocurrency mining is strategic in nature and has lower economic returns than data centers.”

Although both decrees include provisions “to facilitate a smooth transition to the new tariff for current customers of the electricity distributor who will be subject to this new tariff”, it remains to be seen whether cryptocurrency mining centers will be interested in absorbing an even sharper increase than that of data centers to continue their activities.

No application has yet been submitted to the Régie.

In an email to La Presse Canadienne, the Energy Board clarifies that Hydro-Québec “did not request any special rates for data centres or for cryptographic use applied to blockchains” during the 2026-2027-2028 rate review.

It remains to be seen how quickly the matter can be resolved, since this request for tariff revision was submitted in July 2025. Four documents relating to the upcoming tariff changes were filed after Jan. 28, the date of the decrees by the state-owned company to the Régie as part of its request for tariff revision, but none of them address the issue of data centers or blockchains dedicated to cryptocurrencies.

–This report by La Presse Canadienne was translated by CityNews