The federal government wants to build a new data centre near Ottawa that could cost taxpayers up to $1.85 billion.

The facility would be used by the Communications Security Establishment (CSE), Canada’s cyber intelligence agency, which helps protect government computer systems and gathers foreign intelligence.

Defence Construction Canada posted an advance procurement notice on October 7 for the proposed 60-megawatt data centre in the National Capital Region. The estimated construction cost is between $1.5 billion and $1.85 billion.

In a statement to CTV News Ottawa, CSE confirmed the facility would give the agency more secure computing capacity for its current and future work.

The agency said the investment is part of the federal government’s broader defence spending plans, as it looks to upgrade its technology and deal with growing security threats.

The building would include specialized electrical and cooling systems to handle newer computing equipment, along with office space and areas for receiving and shipping hardware.

Canada has seen several major data centre projects announced this year. Bell is building a $1.7 billion AI data centre in Saskatchewan, while Telus is working with the federal government on AI data centres in B.C.

Those projects are separate from CSE’s proposed facility, but they show how much money is going into Canadian computing infrastructure. Ottawa has also committed billions toward expanding Canada’s domestic AI computing capacity.

Of course, running a data centre this size takes a lot of electricity, and Ottawa is already seeing growing demand.

According to CTV News, Hydro Ottawa received 34 requests from large electricity customers over the past two years, representing a combined 1,075 megawatts of potential demand. Data centres alone accounted for 653 megawatts.

Ottawa city council has already asked staff to look at how new data centres could affect the city’s electricity supply and the environment.

Similar concerns have come up elsewhere in Canada. In Vancouver, Telus’ planned AI data centres sparked protests over electricity and water use. Saskatchewan has also faced questions about how Bell’s expanding data centre operations will be powered.

As for the federal project near Ottawa, nothing has been approved just yet. The government expects to start accepting construction bids in winter 2027, but there’s no confirmed date for when work could begin.

Companies interested in bidding will also need security clearances, given who the facility is being built for.

The exact location hasn’t been disclosed, and CSE isn’t sharing much more about the technical requirements for security reasons.