What the 2026 midterms mean for data centre development in the US and Canada

The political landscape for North American data centre development is continuing to shift. The US midterms elevated candidates that ran, at least in part, on opposition to data centre development, and local initiatives seeking to restrict new projects scored significant victories. But with hundreds of billions of dollars in AI infrastructure investment still in play, a more challenging US development environment could create opportunities in Canada, where governments are establishing frameworks to attract investment while addressing energy use and community concerns. Elon Musk famously quipped after the election “data centres in space looking pretty appealing right now”. Market participants should consider fixing their eyes not on the heavens but on the Great White North.

What you need to know

• Political opposition to data centre development surged in the 2026 US midterms, with successful gubernatorial candidates and local ballot initiatives supporting moratoriums and other restrictions.
• Developers and investors in the US should prepare for heightened scrutiny of projects and sharpen their focus on diligence, government relations, community engagement, insurance, and regulatory strategy.
• A more challenging US development environment could create opportunities for Canada, where governments are establishing frameworks aimed at attracting AI infrastructure investment while managing energy use and community impacts.

A wave of opposition in the US

The 2026 US midterm elections revealed the size of the wave of political opposition to data centre development across the country, as candidates who oppose data centre construction won key governors races in Texas, Georgia, and Ohio. In total, twenty-six gubernatorial candidates across 21 states backed some form of moratorium on data centre development ahead of election day. Dozens of local ballot measures to restrict the AI buildout also passed.

While public awareness of and opposition to data centres has also increased in Canada in the past several years, the potential tightening of data centre development in the US could create an opportunity for projects in Canada. Large-scale data centre development has proceeded at a slower pace in Canada, and governments have been creating policies that aim to avoid the opposition seen in the US, in part by proposing initiatives designed to attract investment on a measured basis intended to maximize local benefits while limiting impacts on local utilities.

Here are the key takeaways on what the latest developments from the November midterms mean for developers and investors in the US—and the opportunities that could result in Canada.

2026 US midterms results

Newly elected Texas Governor Gina Hinojosa campaigned on an immediate moratorium of data centre development, saying she would halt approvals until new laws were established. Texas has been a focal point of the AI buildout and the state accounts for nearly 30% of US data centre capacity set to come online in 2028¹.

Georgia has been a growing hub of data centre development, but local opposition has been on the rise. The state’s new Governor, Keisha Lance Bottoms, called for a moratorium on the new construction of data centres during the campaign. In Ohio, Amy Acton won the governor’s office and, as a candidate, supported an immediate conditional moratorium on data centres. Ohio is home to more than 200 data centres, the fifth-highest total among US states. The new Governor of Michigan, Jocelyn Benson, campaigned on a moratorium on data centres.

In New York, Governor Kathy Hochul was re-elected. In July 2026, New York became the first state to impose a statewide moratorium on large data centre construction. The new governor of Nevada, Aaron Ford, promised a range of new standards for data centres.

There were 41 local ballot initiatives across the US to limit or prevent data centre development on election day, with more than half of them in Ohio. Voters passed 40 of the measures. Exit polling found that 76% of respondents said they would oppose the construction of a new AI data centre in their community².

What’s next for data centre development in the US

In August, we wrote that ground-up data centre development carries more risk and requires earlier and deeper investment in government relations, community engagement, and regulatory strategy. This is even more pronounced today.

The midterms show how critical it is for investors to quickly adapt to this new political reality and address the community concerns that helped drive the election results. Public concerns about electricity, water use, noise, location, and the pace of construction clearly have the power to restrict development.

Institutional investors will need to continue to sharpen their focus on diligence and deal with the wave of opposition as a fundamental business issue. Parties will need to be ready for the possibility of more stringent legislation and greater regulatory scrutiny.

Opportunities for Canada

Canada’s federal and provincial governments have been positioning themselves for investment in AI infrastructure through a range of policies, legislation and regulatory initiatives that encourage responsible investment, address data centre energy use, provide data hosting and processing in Canada, and work to achieve public buy-in.

While similar public opposition trends to data centre growth have been seen in Canada, the moratorium movement has been mostly at the municipal level and has been met with mixed results: Mississauga and Oakville, major centres just outside of Toronto, have enacted limited moratoria, while just a short drive away the cities of Hamilton and Burlington rejected similar calls. 

While a number of these policies evince enthusiasm for Canadian-owned or controlled sovereign compute, that should not be seen as a prerequisite to participating in Canada’s data centre environment. It should also be noted that while Canadian ownership or control is fundamental to the development of Canadian sovereign compute, there is often opportunity for non-Canadian investment or partnership (while retaining Canadian control) in furtherance of a sovereign hosting solution.

These policies vary in their enthusiasm for data centre development, but each provides a path for clearing the way for greater investment.

Alberta

Alberta currently leads the country by providing certainty about how data centre loads are regulated in the province. The Alberta government released its AI Data Centre Strategy in December 2024 and announced its Data Centre Regulation in June 2026. The regulation supports major compute investments and includes a “bring-your-own-power” approach, under which proponents must bring their own generation source so as not to burden Alberta’s electricity grid.

In June 2026, Meta announced its first Canadian data centre campus located in Sturgeon County, central Alberta, representing an investment of more than $13 billion, one of the largest private-sector investments in Canadian history. The heads of Alberta’s two largest independent power providers say that the province’s data-centre policies will go a long way to successfully draw projects to Alberta and could help avoid development pushback seen in the US³.

As in Ontario, municipal moratoria on data centres have started to appear, particularly near large population centres. Well-located data centres in Alberta, however, continue to advance.

Ontario

Ontario is positioning itself as a potential growth jurisdiction for data centres and released its Data Centre Playbook (Playbook) in August 2026. The proposed framework outlines how the province plans to evaluate large-scale data centres against the government’s objectives of driving economic growth, keeping Canadians’ data in Canada (including potentially through sovereign hosting solutions), and delivering benefits to local communities. Ontario expects to release the final version of the Playbook, which will support its AI Industrial Strategy, this year. The provincial government said in early November that Ontario has been receiving “lots of proposals” for new projects since the release of the Playbook⁴.

Saskatchewan

Saskatchewan released a Data Centre Framework in August 2026 prioritizing Canadian ownership and data sovereignty, local job creation and partnerships on a “bring-your-own-power” basis. The expectation is that a centralized streamlined permitting regime will be introduced as well.

BC

In British Columbia, the provincial government and BC Hydro launched a new competitive process for AI and data centres in January 2026, to help manage rising electricity demand and create a clear, transparent approach for future projects. In a separate announcement from earlier this year, the federal government issued a call for proposals for large-scale data centres with a capacity of more than 100 MW. Following that process, the federal government is advancing work with TELUS to increase compute capacity in British Columbia by more than 60,000 GPUs by 2032 through a proposed Sovereign AI Factory cluster.

Federal

The federal government announced Canada’s Responsible Data Centre Development Principles in September 2026 to establish a common national framework for how data centres are built. These national principles are intended to complement existing provincial, territorial, municipal, and Indigenous regulatory processes. Twenty-three AI and digital infrastructure companies are signatories to the framework. In June 2026, the federal government released its National Artificial Intelligence Strategy: AI for All, outlining a framework for developing Canada’s AI capabilities while protecting Canadian jobs, privacy, and security. Building on the 2025 federal budget’s pledges to spur investment in data centres and sovereign compute, the newly released 2026 federal budget announces that new financial tools will be introduced, such as backstops and offtake agreements, to mobilize private capital and expand compute capacity to enable Canadian AI companies to access 500 MW of sovereign AI.

Torys has previously examined the growing opposition to data centre development in the US—and our Investing in Canada primer series includes a detailed look at the opportunities for the development of AI compute infrastructure across the country.