First nation’s water licence fight threatens billion-dollar data centre investment in northern Alberta

A First Nation in northern Alberta has won a legal challenge against the provincial government’s approval of a water licence tied to a multi-billion-dollar data centre project backed by celebrity investor Kevin O’Leary.

Sturgeon Lake Cree Nation argued Alberta failed in its duty to consult before granting the licence to the Municipal District of Greenview more than a year ago. Issued under the province’s Water Act, the licence allows the diversion of six million cubic metres of water from the Smoky River for the proposed Wonder Valley project.

Sheila Gunn Reid criticized Sturgeon Lake Cree Nation’s challenge of the data centre project during Monday’s live stream. “What they’re doing here to the data centres is exactly what they’re doing to the oil and gas sector,” she said.

“They are using activist courts, Indigenous consultation, and the terror of the regulatory regime to just scare away business,” Sheila continued. “Kevin O’Leary’s like, I want to spend billions, billions. I want to put it in your backyard, I want to give Indigenous electricians $300,000 a year. That’s what I want to do. And they’re like, get out of here.”

The venture, led by O’Leary’s O’Leary Digital, would see an artificial intelligence data centre built in the Greenview Industrial Gateway, a heavy industrial zone northwest of Edmonton and south of Sturgeon Lake Cree Nation. The land does not sit within the First Nation’s reserve, but the Smoky River runs through treaty lands, forming the basis of the consultation dispute.

Alberta’s industrial-zoned data centres differ from those elsewhere, as operators must generate their own electricity and run closed-loop water systems, meaning ongoing water withdrawals beyond the initial fill are minimal.

Wonder Valley was pitched as a major private investment in Alberta’s industrial economy, with promises of high-paying jobs for the region, including for Indigenous workers. The project’s timeline now hinges on the outcome of further court proceedings.

Alberta has increasingly become a flashpoint for legal and regulatory challenges to large-scale industrial projects, from data centres to oil and gas developments.