Artificial intelligence (AI) data centres are rapidly transforming the North American landscape, appearing swiftly and unexpectedly across Canada. The central issue centres on water usage, as some AI data centres can consume millions of litres of potable water daily.
Kathryn Barnwell, retired English professor in Nanaimo, B.C., voices a growing concern “Life on this planet is sustained by water. It is not sustained by data. We don’t need data the way we need water.” Barnwell positions herself as part of a global resistance, highlighting the water and electricity demands of data centres and their potential to impact communities in Canada and worldwide negatively. Yet she confronts an uphill battle as government leaders, investors, and major corporations rapidly advance the Canadian AI data centre agenda. *
How we got here: A brief data centre history
Data centres are not new. The first true data centre, ENIAC, was opened and operated by the University of Pennsylvania in 1945, and it relied on water for cooling, using vacuum tubes.
However, unlike today’s AI data centres, which are typically housed in 100,000-square-foot buildings, ENIAC occupied only a 1,500-square-foot space. Further, it operated for just a few hours per day, rather than today’s 24/7 approach.
The development of cloud computing in the mid-2000s revealed that technology companies and investors would soon need large, water-intensive data centres worldwide. This demand accelerated further with the rise and widespread adoption of AI. By 2023, global data centres, including those supporting AI workloads, were estimated to consume billions of litres of water annually for cooling and related uses, and that figure is projected to grow as computational demand increases.
The sudden expansion of AI data centres caught many Canadian leaders off guard, and uncertainty remains about their long-term impact on commercial buildings.
The measurement problem
While Canadian data centres can use huge amounts of water per year, some municipalities lack comprehensive ways to measure and meter how much water these facilities consume. This inability to track actual consumption is expected to change quickly as facilities’ water use is monitored more closely. Additionally, water-related costs are expected to climb sharply.
More money will also need to be spent to update water infrastructure throughout Canada. However, supplying water to these data facilities will be expensive, and these costs will likely also be passed on to all water users, rather than just the data centres. Hospitals, shopping centres, food service facilities, and hotels are expected to feel the price pinch first, with impacts then spreading throughout the commercial real estate industry.
Many Canadian municipalities will likely develop water-pricing strategies, such as tiered pricing. This approach encourages sustainability by charging a single price for water up to a base consumption level and applying higher rates once that level is exceeded.
The regulatory response
Compared to most U.S. states, which already have regulations on water consumption – particularly regarding responsible and efficient water use – Canada does not. Building owners and managers should expect this to change as more municipalities require commercial facilities to use highly efficient water-using mechanical systems, such as new HVAC units.
In restrooms, low-flow fixtures will certainly be required. To further reduce water consumption and water-related costs, expect no-flow restroom fixtures, specifically waterless urinals, to be encouraged, if not mandated. Native landscaping (the planting of vegetation indigenous to a specific area of Canada, including trees, shrubs, and hedges) will also be advanced to help minimize evaporation and contribute to the well-being of local ecosystems.
Municipalities will need to better understand how AI data centres use water, when peak water demand occurs, and the pressure this places on water supply for other commercial facilities, schools, businesses, industry, and homes. To meet demand, all facilities – commercial and residential – will need to reduce water consumption long-term and become much more water efficient.
Introducing water risk assessments
In the coming years, the term “water risk” will become increasingly common in Canada. Investors planning commercial or residential developments will increasingly wonder whether to pursue projects in certain areas of the country based on current and future water needs, especially if an AI data centre is planned nearby.
To determine this, water risk assessments will need to be conducted. A water risk assessment analyzes current needs and the future impacts of new development, population growth, and changes in an area’s climate, all of which can affect water challenges and opportunities.
This focus on the risk of water use is already taking hold in parts of British Columbia, Ontario, and Quebec. Municipalities hope to avoid the issues seen in parts of Arizona over the past few years, where some developments have been built without fully considering their water needs, leading to shortages, expensive legal battles, and water uncertainty. Much of this could have been prevented with a water risk assessment.
The path forward
Years of research and discussion on water challenges have led to a clear conclusion: addressing the impact of AI data centres on water resources requires embracing water efficiency as our primary strategy.
The concerns raised by people like Kathryn Barnwell are legitimate and urgent. Communities across Canada are right to question whether the explosive growth of AI data centres is sustainable, given current and future water constraints.
Yet while the rapid rise of AI data centres presents significant challenges, these obstacles are solvable. Innovative technologies, including AI itself, can enable us to use water more efficiently in both data centres and commercial facilities. Smart monitoring systems, advanced cooling technologies, and predictive analytics can help ensure that today’s concerns lead to tomorrow’s solutions.
The question is whether government, industry, and communities can work together quickly enough to implement these solutions. This will help prevent water scarcity become a major concern in Canada’s commercial real estate landscape.
Klaus Reichardt, founder and CEO of Waterless Co. LLC in Vista, California, is a recognized authority on water conservation. Since 1991, he has led the company in developing plumbing products, including the Waterless No-Flush urinal, which operates entirely without water. To contact Klaus, click here.
*Microsoft has made a $19 billion commitment to Canada to develop AI infrastructure.
Source:
AI-related data centres use vast amounts of water. But gauging how much is a murky business; Jonathan Montpetit, Yvette Brend · CBC News · Posted: Oct 18, 2025 3:00 AM CDT | Last Updated: October 22, 2025
