What should the NWT’s approach to data centres look like?

Residents across the NWT are discussing the potential benefits and drawbacks of data centres following a proposal to build a facility in Kátł’odeeche First Nation.

Lyle Fabian, president and chief executive officer of Katlotech Communications Ltd, has long proposed a fibre line from High Level in Alberta to Kátł’odeeche First Nation in the NWT’s South Slave region.

Fabian wants to connect the fibre line to a data centre on the First Nation’s land. He said his IceFox Data Centre became a formal project in 2025.

“The idea is to combine the fibre backbone with the local infrastructure so northern and Indigenous organizations don’t have to send their data thousands of kilometres south to the nearest internet exchange, which is Calgary,” he told Cabin Radio.

Fabian, a Kátł’odeeche First Nation member, said potential benefits include Indigenous-owned infrastructure, telecommunications resilience, data sovereignty, and long-term skilled northern and Indigenous employment.

“We believe this opportunity should be in the North and for the North,” he said.

Fabian said the fibre line and data centre would also support Katlotech’s proposal to launch an entertainment streaming service for northerners that does not require internet access. He said he wants to work with Indigenous-language speakers to provide voiceovers for movies and TV shows on the platform.

Michael Miltenberger, a former NWT MLA and cabinet member who lives in Fort Smith, is a backer of the IceFox Data Centre. He said the sector has “enormous potential.”

“I’m very, very interested in this,” Miltenberger said. “Lyle’s a good representative to get this done and it’s going to benefit us.”

Miltenberger believes the territorial government’s management of another NWT telecommunications project, the Mackenzie Valley Fibre Link, has not maximized benefits to northerners.

Fabian’s project, he said, is “a chance to do it better.”

What kind of data centre is IceFox?

Questioned about the project’s environmental impact, Fabian said IceFox is a “traditional” data centre rather than a large-scale AI data centre.

Fabian said the proposed data centre will use modular units with 35-kilowatt and 100-kilowatt capacity. A petition he launched in support of the project in 2025 states that, in the long term, the data centre could grow to have a total capacity of three megawatts.

Comparatively, Meta’s hyperscale gas-powered data centre in Sturgeon County, Alberta, is expected to have one gigawatt of capacity, equivalent to 1,000 megawatts.

Fabian intends for the IceFox data centre to be powered by the South Slave’s Taltson hydro facility, be designed for the northern climate, and cooled by air, not water.

“People who are concerned about the environment need to do a little bit more research,” he said.

A webpage for the IceFox project states it will provide “secure colocation, cloud infrastructure, data storage, disaster recovery, private connectivity, and selected AI-computing services.”

Fabian said the data centre would be built on a gravel pad at a former air navigation facility, which he described as an already disturbed industrial area on reserve land.

According to Nav Canada, the facility was built by Transport Canada in the early 1970s. All structures were removed from the site in July 2001 and environmental site assessments have been completed.

Fabian said IceFox must go through regulatory approvals including an environmental assessment to move forward – and it also needs funding.

He said he will discuss the project with Kátł’odeeche First Nation members and has shared information at previous band meetings, but will not discuss the project with people who are not members of the First Nation.

Responding to concerns about the project, the Kátł’odeeche First Nation said in a statement posted to Facebook last month that it is focused on “protecting our nation, safeguarding our lands and waters, preserving our environment and culture, and creating lasting opportunities and prosperity for our members and for generations to come.”

“Any proposed development – including the consideration of an AI data centre – must be approached with care, responsibility and due diligence,” the First Nation said.

“Environmental protection, water resources, potential impacts on our lands, regulatory requirements and the interests and concerns of our members must all be carefully considered before any decisions are made.”

Traditional versus AI data centres

Data centres house computer systems that store, process and distribute digital information. They can power cloud storage systems, streaming services, websites and apps.

Compared to traditional data centres, AI data centres use more powerful computer chips and consume more energy, create more noise, can produce higher greenhouse gas emissions, and generate more heat – which can require large amounts of water for cooling.

The federal government is investing billions of dollars to support AI computing capacity in Canada, and is promoting the country as an attractive destination for large-scale AI data centres due to its cold climate and reliable, low-cost energy supply.

But AI data centres have faced pushback from residents across Canada with concerns about land use, pollution, noise, heat, electronic waste and strain on water reservoirs and energy grids, alongside concerns about the AI models they train and run.

Fabian said he does not support large-scale AI data centres in areas impacted by drought conditions, pointing to a proposed massive data centre complex in Olds, Alberta as an example. (The Alberta Utilities Commission recently denied an application to build a natural gas plant to power that project.)

Fabian has made clear he is proposing a conventional data centre, not a large-scale AI facility. However, there are people who think the NWT should lean into the larger end of the spectrum.

Lou Covello, a geologist who founded Aurora Geosciences, said he believes the territory could benefit from hyperscale AI data centres.

In an essay shared with Cabin Radio and NNSL, Covello argued the NWT should build a massive hydroelectric complex on the Mackenzie River, use the power it generates to displace diesel and support AI data centres, and sell the excess power to Alberta and Saskatchewan.

He said the heat created by data centres could warm homes and support indoor agriculture.

Covello called his concept a “trillion dollar opportunity.”

“With the current military buildup in the Northwest Territories and in the North generally, in the three territories, your thoughts immediately go to sovereignty, and I thought a project like this would be a major addition to sovereignty,” Covello told Cabin Radio.

“Secondly, the whole idea of Canada not participating in the development of AI is not a good idea at all.”

Covello said he based his essay on a 2015 concept study for a hydroelectric complex on the Mackenzie River, as well as a more recent paywalled opinion piece by a writer that supports hyperscale AI data centre construction in Canada.

Covello dismissed concerns that AI data centres in the NWT would use large amounts of water and described opposition to such facilities as “badly misplaced.”

While there are currently no hyperscale AI data centres in the Canadian Arctic, some exist elsewhere in the region including in Iceland, Russia, Alaska, Finland and Norway.

Such centres can use several kinds of cooling systems. Their developers have said they are trying to find ways to be more water-efficient.

In cold climates, AI data centres can use “free cooling” for most of the year: naturally cold air or water. This can reduce electricity usage, but free cooling systems often need mechanical backup to support peak demand and operation during warmer seasons.

‘We need to take a step back’

Though some people are pushing for data centre development in the NWT, others are calling for greater regulation and more research before projects are considered.

The Acho Dene Koe First Nation, based in Fort Liard, set out its position in a statement last month. (Whether a proposal exists for a data centre on the First Nation’s territory was not clear.)

In that statement, the First Nation welcomed innovation but not at the “expense of our lands, waters or future generations.”

“We recognize that new technologies and infrastructure can bring economic benefits, training opportunities and sustained prosperity – if they are planned responsibly and in partnership with Indigenous governments,” the First Nation said.

“Our territory already carries the burden of projects that were not properly closed, remediated or reclaimed. Acho Dene Koe First Nation will not accept a future where we are again left with environmental damage – whether from a mine, a hydro station or an AI data centre.”

Lois Little, a social and climate activist in Yellowknife, said she worries about the impacts AI data centres will have on the climate, including projects proposed upstream in Alberta.

“Whether it is a small installation or a huge installation, we do not in this jurisdiction have any legislation that I’m aware of or any ability to assess the impacts,” she said.

“We need to take a step back and see what’s happened in different jurisdictions, and make sure we have regulations and legislation that protects ecosystems and human environments.

“This isn’t a black and white discussion of being for or against, this is a brave new world and we’ve got so much to learn before we can even contemplate something like this within this context of climate change and low water levels.”

Environmental advocacy group Ecology North said it would support at least a one-year moratorium on data centres being proposed or developed in the territory, pointing out the Arctic is currently warming four times faster than the rest of the world and the territory has already experienced drought and historic wildfires.

“The Northwest Territories is already over-reliant on fossil fuels to heat and power our communities,” Ecology North told Cabin Radio in an emailed statement.

“How will we generate and transmit enough power to support even one of these systems when we are still waiting on projects to be completed that will ensure we can keep up with the existing needs of our grid?”

Versions of progress

Jesse Cardinal, executive director of Indigenous-led water protection group Keepers of the Water, said AI data centres come with a huge learning curve – and a lack of transparency from companies proposing them as “the next greatest thing.”

“We’ve seen this trick and pony show before called the oil industry, the fossil fuel industry, where they sell to the community all of these wonderful benefits, no impacts, and we know that’s not true,” said Cardinal, whose organization focuses on the flow of water into the Arctic Ocean.

Cardinal said even data centres that use closed-loop systems – a type of cooling often involving less water than evaporative methods, but at greater cost and electricity use– can affect communities already struggling with drought conditions.

“We need more information to make good decisions,” she said.

“We cannot only go on the word of what the companies are telling us. We need independent oversight and we need that to be funded by governments.”

Fort Simpson resident Jerri Brenton recently wrote to Nahendeh MLA Shane Thompson, Dehcho Grand Chief Herb Norwegian, and Łı́ı́dlı̨ı̨ Kų́ę́ First Nation Chief Kele Antoine calling for a moratorium on AI data centre development in the NWT.

“The amount of them that are going up, there is no way the Earth can sustain itself,” she told Cabin Radio of the data centre surge. (She said she had not received a response to her letter.)

“The North is such a rare place and it’s really up to us to protect ourselves, the land and the animals,” Brenton said.

“We don’t have to accept every version of progress we’re offered.”