Canada Data Center Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

Canada Data Center Market Analysis

The Canada Data Center Market size is estimated at 1.37 thousand MW in 2025, and is expected to reach 2.01 thousand MW by 2030, growing at a CAGR of 7.97%. Further, the market is expected to generate colocation revenue of USD 1,419.3 Million in 2025 and is projected to reach USD 2,759.1 Million by 2030, growing at a CAGR of 14.22% during the forecast period (2025-2030).

The data center market overview reveals that the Canadian data center landscape is experiencing significant transformation driven by technological advancement and industrial modernization. Manufacturing automation has positioned Canada as the 18th-ranked country globally in robot density, with 165 units deployed per 10,000 employees. The agricultural sector has embraced digital transformation, with 27% of farms utilizing autosteer equipment, 13% implementing GPS mapping systems, and 3.5% incorporating drone technology. This widespread adoption of industrial automation and precision agriculture technologies has created substantial demand for data processing and storage capabilities across various sectors.

The market is witnessing substantial infrastructure investments and expansion initiatives from major industry players. In March 2022, Vantage Data Centers announced a significant CAD 900 million investment to scale its Canadian operations, including the development of a third campus in Montreal and expansion of existing facilities in Montreal and Quebec City. The deployment of advanced technologies is expected to generate considerable economic impact, with 5G wireless technology alone projected to contribute approximately USD 40 billion annually to the Canadian economy over the next four years.

Digital transformation across various sectors is reshaping consumer behavior and business operations. The financial services sector has witnessed significant digital adoption, with approximately 45% of Canadians now using digital payments for both in-store and online transactions. The entertainment industry has also experienced substantial digital transformation, achieving a 74% penetration rate for streaming services, with millennials representing the largest user segment at 82% of subscribers. This shift towards digital services has intensified the demand for robust data center infrastructure.

The Canadian government's commitment to digital infrastructure development has established ambitious connectivity goals and regulatory frameworks. The government has outlined plans to achieve internet access for 98% of Canadian homes by 2026, with a target of complete broadband internet coverage by 2030. This initiative is supported by comprehensive data protection regulations, including the Personal Information Protection and Electronic Documents Act (PIPEDA) and provincial data privacy acts. The regulatory framework ensures data security while promoting technological advancement, with facilities requiring compliance with international standards such as ISO, PCI DSS 3.2.1, and various green building certifications.

Canada Data Center Market Trends

Increasing time on mobile apps and increasing 5G users to boost the market's growth

• Data consumption through smartphones is expected to increase over the forecast period in Canada, recording a CAGR of about 8.6% from 2022 to 2029. A significant increase in data consumption was observed around 2020, contributed by remote working during the COVID-19 pandemic. Canadians spent an average of 4.4 hours on mobile apps in 2021, up from 3.9 hours in 2020. This highlights the significant smartphone usage contributed by apps, which majorly adds to data consumption.
• As the country plans to develop more smart cities in the future, it will integrate IoT, blockchain, AI, and other cutting-edge technologies, resulting in more significant data generation. According to the Government of Canada's Smart Cities Challenge launched in 2017, more than 225 municipalities expressed an inclination to explore the plan's advantages by filing their applications, demonstrating interest in developing more smart regions in the future. This would further be bolstered by the emergence of 5G services in smartphones and other faster network technologies, giving rise to wider deployment of smart devices that are controlled by apps in smartphones.
• The revenue generated from some of the most downloaded games in Canada across Android and iOS smartphones amounted to more than USD 1.1 million, signifying the high involvement of users in the app and subsequent in-app purchases despite them registering a lesser number of downloads compared to social media apps. The number of 5G users is expected to increase from 7% in 2021 to about 62% by 2025, further contributing to data consumption and network evolution over the forecast period.

Rising smartphone ownership and increasing in number of app downloads to boost the market's growth

• Smartphone usage in Canada is expected to record a CAGR of about 1.92% from 2022 to 2029. As of 2016, the smartphone ownership rate in Canada was about 76%, which increased to about 80.3% by 2018 and reached nearly 89% by 2021. The increase from 84.4% smartphone ownership in 2020 to 89% a year later can be attributed to the COVID-19 pandemic-led changes, primarily for remote education and working patterns. The smartphone ownership rates are estimated to reach about 90% by 2025. The increase is majorly supported by the decreasing monthly smartphone price index, decreasing from about 97.1 in January 2016 to about 42.8 in January 2021.
• Although the data plans in Canada are on the higher side compared to other countries, different facilities, like contracting through a network operator, help in owning one. Customers can opt from among nine national operators to choose their required plan, further supporting the ownership of smartphones in the country.
• Data regarding the number of apps downloaded on Android smartphones highlighted that social media and online gaming apps account for the highest number of downloads. A similar trend was observed in the apps downloaded by iPhone users, with social media and online gaming apps accounting for the maximum usage. Revenue from e-commerce sales in Canada through smartphones accounted for about USD 28 billion. It is expected to reach about USD 57 billion by 2025, which is in line with the estimated increase in smartphone usage in the country.
• The rising usage of smartphones is increasing data consumption. Over the forecast period, the country is expected to attract more apps and online platforms, requiring more processing and storage spaces and directly boosting the need for more data centers.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

Segment Analysis: Data Center Size

Massive Segment in Canada Data Center Market

The massive data center segment dominates the Canadian market, holding approximately 36% market share in 2024. This significant market position is attributed to the growing adoption of smart devices for home automation, increasing demand for digitization applications, and the evolution of smart cities across Canada. The segment's prominence is further strengthened by government incentives for taxes and land, along with the availability of renewable energy sources. Quebec currently leads the massive data center deployment with around 71% of the segment's capacity, followed by Ontario and Alberta, showcasing the strategic geographical distribution of these facilities across the country. The typical data center size in this segment reflects the industry's focus on scalability and efficiency.

Mega Segment in Canada Data Center Market

The mega data center segment is experiencing robust growth in the Canadian market, projected to grow at approximately 12% during 2024-2029. This growth is primarily driven by the rising adoption of streaming services, online gaming, smart home automation devices, and smart city services. Large businesses increasingly prefer mega data centers due to their superior features such as high bandwidth, low latency, and comprehensive disaster recovery capabilities. The segment's expansion is particularly notable in Ontario and Quebec, where major operators like Vantage Data Center and Digital Realty are actively developing new facilities to meet the escalating demand for advanced data center capabilities. The average size of a data center in this category is designed to accommodate the increasing data demands efficiently.

Remaining Segments in Data Center Size

The Canadian data center market encompasses several other significant segments, including large, medium, and small data centers, each serving distinct market needs. The large segment caters to enterprises requiring robust security protocols and remote assistance capabilities while maintaining cost-effectiveness. Medium data centers focus on providing services to growing enterprises that prioritize proximity to their business operations and affordable solutions. The small segment serves specific niche markets, particularly catering to small and medium enterprises requiring basic data storage and processing capabilities. These segments collectively contribute to creating a comprehensive data center ecosystem that addresses varying business requirements across different scales of operation. The data center size MW in these segments varies significantly, reflecting the diverse needs of Canadian enterprises.

Segment Analysis: Tier Type

Tier 3 Segment in Canada Data Center Market

The Tier 3 segment dominates the Canadian data center market, accounting for approximately 67% of the total IT load capacity in 2024. This significant market share can be attributed to the segment's widespread adoption across various regions, including Quebec, Ontario, Alberta, British Columbia, and Manitoba. Quebec currently leads the Tier 3 data center deployment with around 61% market share, followed by Ontario at 26%, Alberta at 8%, British Columbia at 4%, and Manitoba at 1%. The segment's prominence is driven by massive data centers holding about 43% of the market share, followed by large data centers at 41%, mega facilities at 12%, medium facilities at 3%, and small facilities at less than 1%. Major players like Vantage Data Centers, eStruxture, and Equinix Inc. have significantly invested in Tier 3 facilities, recognizing the growing demand for reliable and redundant data center infrastructure.

Tier 4 Segment in Canada Data Center Market

The Tier 4 data center Canada segment is experiencing the most rapid growth in the Canadian data center market, with a projected growth rate of approximately 23% during 2024-2029. This exceptional growth is driven by factors such as increasing adoption of digitization applications, the proliferation of smart city projects, and widespread implementation of IoT technology across home, agriculture, and manufacturing applications. Currently operating in strategic locations like Toronto and Vaughan, these high-reliability data centers are witnessing substantial expansion, with Vaughan leading at about 64% market share followed by Toronto at 36%. The segment's growth is further supported by major industry players like Digital Realty and Equinix, while companies such as Cologix and Enovum data centers have announced plans to establish new massive data center facilities, indicating strong future expansion potential in this tier category.

Remaining Segments in Tier Type

The Tier 1&2 segment represents the foundational level of data center infrastructure in Canada, primarily serving small and medium enterprises (SMEs) seeking cost-effective solutions. These facilities are distributed across multiple regions, including Ontario, Quebec, British Columbia, Alberta, New Brunswick, and Prince Edward Island, with Ontario leading the deployment. While these lower-tier facilities offer basic infrastructure and affordability advantages, they typically lack advanced features and redundancy capabilities found in higher tiers. The segment continues to serve an important role in the market by providing essential services to businesses with basic data center requirements and budget constraints, though their market influence is gradually diminishing as enterprises increasingly opt for higher-tier facilities.

Segment Analysis: Absorption

Utilized Segment in Canada Data Center Market

The Utilized segment dominates the Canadian data center market, accounting for approximately 77% of the total IT load capacity in 2024. This significant market share is driven by the increasing adoption of cloud services, rising data consumption, and growing digitalization across various sectors. The segment's dominance is particularly evident in major data center hubs like Quebec and Ontario, where operators are maximizing their infrastructure utilization to meet the surging demand from enterprises transitioning to digital platforms. The high utilization rates are supported by the growing adoption of hyperscale, retail, and wholesale colocation services, with hyperscale facilities leading the segment due to their ability to handle large-scale operations efficiently. The segment's strong position is further reinforced by Canada's favorable business environment, including access to renewable energy, cold climate advantages, and supportive government policies that encourage data center investments.

Utilized Segment Growth in Canada Data Center Market

The Utilized segment is experiencing robust growth in the Canadian data center market, with hyperscale facilities leading the expansion at approximately a 13% growth rate from 2024 to 2029. This impressive growth trajectory is driven by several factors, including the increasing demand for cloud computing services, the expansion of digital infrastructure, and the rising adoption of emerging technologies like IoT and AI. The segment's growth is particularly notable in Quebec and Ontario, where major operators are expanding their facilities to accommodate the growing needs of cloud providers, financial institutions, and technology companies. The expansion is supported by Canada's strategic advantages, including abundant renewable energy sources, favorable climate conditions for natural cooling, and strong government support through various incentive programs. Additionally, the growing trend toward edge computing and the increasing demand for low-latency services are contributing to the segment's rapid expansion across different regions of Canada. The capacity of data center utilization continues to be a critical factor in meeting the evolving demands of the digital economy.

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