Manitoba plans to use money from a levy on AI data centres and cryptocurrency mining to lower utility rates for residential customers.
The news: Last Thursday, provincial Finance Minister Adrien Sala said revenue from Manitoba’s tax on cryptocurrency mining and AI data centres would be used to lower Manitoba Hydro rates for residential ratepayers. The levy, passed into law last summer, includes 100 percent markups on electricity used by crypto operations and data centres over 5 megawatts. Sala said his government predicts the levy could draw as much as $20 million in revenue, offsetting rates by $50 per year for Manitoba households. The province will begin to lower Manitoba Hydro bills early next year.
From the source: “Our government is focused on making life more affordable for Manitobans, and that includes keeping hydro rates as low as possible for families,” said Sala in a statement. “Large cryptocurrency operations and AI data centres use significant amounts of electricity, and they should contribute fairly to the system we all rely on.”
The context: Manitoba’s levy came into effect last June, when Manitoba passed a law requiring its provincial utility, Manitoba Hydro, to create distinct customer classes for crypto and data centre customers and other large electricity consumers. Under those classifications, the utility effectively doubles the standard rates cryptocurrency and AI operators pay for the Manitoba Hydro electricity they use.
While the levy takes aim at large-scale AI data centres, Manitoba is not currently home to data centres big enough to pass the threshold for the tax to take effect. The province is home to only one proposed data centre operation that would qualify under the legislation: a 5.5 megawatt project in development near Rosser, Man. That means that presently, revenue will be almost entirely generated via the cryptocurrency industry, which argued earlier this year that the impacts of the legislation would effectively close down Manitoba’s crypto sector.
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Final thought: While much of Canada’s prairie provinces have been actively courting the AI data centre boom, Manitoba has been an outlier. The province has been proactive in disincentivizing the development of large-scale projects within its jurisdiction through restrictive regulations and steep fees. Instead, Manitoba has focused on investing in public infrastructure, renewable energy, and cost-of-living issues. The decision to direct this revenue toward Manitobans’ pocketbooks continues that trend.
BetaKit’s Prairies reporting is funded in part by YEGAF, a not-for-profit dedicated to amplifying business stories in Alberta.
Feature image courtesy of Unsplash.