Canada's AI Ambitions Need Propane

Canadian-made propane can provide on-site power and a reliable alternative to diesel backup generation

OTTAWA, ON, Sept. 29, 2026 — If Canada wants to attract data centre investment and strengthen its position in artificial intelligence and digital innovation, propane can and should be part of the solution.

According to a new report commissioned by the Canadian Propane Association, Energy for the Digital Age: Using Propane to Power Canada’s Data Infrastructure, Canada’s competitiveness in AI and the digital economy will depend on access to reliable, affordable and resilient power. As Canada looks to attract data centre investment, rising electricity demand is placing new pressure on grids and raising an important question for developers: where will that power come from?

“Canada has the technology, talent and ambition to compete in the global AI economy — but we also need the power,” said Shannon Watt, President and CEO of the Canadian Propane Association. “Propane is Canadian-made, abundant and available today. For smaller data centres and backup generation, it can help meet power needs where energy is limited or constrained. We already produce the energy and have the infrastructure to deliver it. The opportunity now is to put Canadian propane to work powering Canadian digital growth.”

There is no single power solution for every data centre or every region. The report identifies applications up to 5 MW as one of propane’s strongest near-term opportunities, particularly where grid capacity is constrained, interconnection timelines are lengthy or natural gas infrastructure is unavailable. Propane can provide flexible, scalable on-site and backup power without requiring a pipeline connection, helping projects move forward sooner while reducing pressure on the electricity grid. The opportunity also extends beyond smaller facilities.

Compared with diesel, propane produces lower emissions and eliminates the risk of soil and groundwater contamination from liquid fuel spills because it vaporizes if released. Propane is also stable in long-term storage, requires less maintenance and operates more quietly than diesel generation.

“Backup generation gives us an opportunity to think differently about how new data centres are designed,” Watt said. “Propane can deliver the reliability these facilities require while offering important operational and environmental advantages.”

The CPA is calling on governments and industry to recognize propane as part of Canada’s strategy for powering data centre growth, including as an alternative to diesel backup generation, and to ensure policies and regulations remain technology neutral.

“There will not be one energy solution for every data centre or every region of Canada,” Watt said. “We need to use the right energy source for the right application. Propane is available today and deserves to be one of the options on the table.”

Read the report: Energy for the Digital Age: Using Propane to Power Canada’s Data Infrastructure and the Executive Summary.

About the Canadian Propane Association

The Canadian Propane Association (CPA) is the national association for a growing, multi-billion-dollar industry that impacts the livelihood of millions of Canadians. As the trusted voice of the propane industry, the CPA creates the conditions for responsible market growth through advocacy, training, and emergency response.

For More Information, contact Tammy Hirsch, Sr. Director, Communications and Marketing: Email: media@propane.ca or Phone: 587-777-3917.