Québec has historically attracted major global technology players such as Microsoft, Google, and Amazon due to its abundant supply of reliable, low-cost hydroelectric power approximately 99% clean electricity combined with highly competitive rates. For many years, this energy advantage positioned Québec as one of the most attractive jurisdictions in North America for large-scale data centers development.

Since the end of the pandemic, however, the energy landscape has changed significantly. The rapid electrification of the economy, driven by decarbonization objectives, combined with growing demand from major industrial sectors, has placed increasing pressure on available electricity supply. In response, the Québec government has adopted a more interventionist approach. Since 2022, it has held the authority to allocate electricity blocks of 5 MW and above, allowing it to more directly manage access to large volumes of power.

A renewed signal of support for the sector emerged in November 2025, when the government announced its intention to promote data centers development by increasing the volume of electricity allocated to this industry over the coming years. At the same time, however, Decree 89-2026 directs the Régie de l’énergie to ensure that the future tariff for data centers reflects the cost of new electricity supply procurement rather than the historical average cost a policy orientation that could effectively result in significantly higher rates, potentially close to double current levels.

Taken together, these developments suggest a more selective and economically differentiated framework for digital infrastructure projects in Québec. While the province remains attractive due to its renewable energy profile and grid reliability, companies may need to reassess long-term cost assumptions, financing models, and competitive positioning. The final impact will depend on the details of Hydro-Québec’s tariff application and the Energy Regulator’s decision, but the regulatory trajectory points toward a more strategic and supply-constrained environment for large electricity consumers.