Casual legal: Farmland to server farm
DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.
By Hannah Schmakeit
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider
Many municipalities in Alberta are exploring the possibility of attracting data centre development. However, if a municipality receives a letter of intent (“LOI”) or memorandum of understanding from a developer interested in building a data centre, it does not mean the project is guaranteed. Rather, it is only the first step in what may become a lengthy and complex process, and only a part of that process is finalizing the agreement outlined by the letter of intent or memorandum of understanding. Municipalities and developers must begin addressing a range of legal, planning, infrastructure, and commercial considerations. These may include determining whether the proposed development complies with the municipality’s land use bylaw and statutory plans, assessing available utility and servicing capacity, and reviewing environmental and regulatory requirements.
In some cases, a data centre may not fit within the applicable zoning or land use bylaws. The developer may need to apply for a rezoning or development approval which may trigger public hearing requirements and additional timelines under the Municipal Government Act, RSA 2000, c M-26. Alternatively, the municipality may consider amendments to the applicable zoning or land use bylaws to designate areas that may be appropriate for data centre development.
Infrastructure capacity is another significant consideration. Data centres can require substantial electrical servicing and increased demands on water, fibre connectivity, transportation access, and emergency services. As a result, municipalities and developers may need to work with utility providers to determine the suitability of existing infrastructure or whether upgrades will be required. Depending on the nature and scale of the project, environmental and regulatory approvals may also play an important role. For example, projects involving significant power generation, water usage, or land disturbance may require provincial approvals, permits, environmental assessments, or other regulatory reviews.
While an LOI may generate public interest, municipalities should recognize that it is only the beginning of a much larger, longer process requiring coordination between developers, utilities, regulators, municipal administration, and legal advisors.
To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1.800.661.7673 or email casuallegal [at] abmunis.ca (casuallegal[at]abmunis[dot]ca) and reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please contact riskcontrol [at] abmunis.ca (riskcontrol[at]abmunis[dot]ca), or call 310.MUNI (6864) to speak to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.
