Recent announcements lead us to believe that Montreal has become the premier location for data centres in Canada. Amazon recently chose Montreal for its new Canadian Region due to lower electricity prices. Google is also establishing its first Canadian data centre in Montreal and IT service providers such as Microsoft, IBM Softlayer and Cologix are already established in both the provinces of Quebec and Ontario.
Commenting on these announcements back in 2016, InsightaaS noted that the Quebec is a preferred locale for new data centres due to its lower power costs, its state-of-the-art facilities and its strong local demand.
The JLL 2017 data centre outlook, however, finds increased demand in both Toronto (15MW demand is projected) and Montreal (12MW). In the firm’s reports for 2016, estimated total capacity commissioned, planned and under construction for Montreal was more than double the estimate for Toronto. The Data Center Map, however, still lists more colocation data centres in Toronto (which has 42) than in Montreal (29).
DuPont Fabros Technology Inc. (DFT) announced this spring that it will open its first Canadian data centre in the former Toronto Star printing plant building in Vaughan Ontario, which forms part of the Greater Toronto Area (GTA).
Is DFT bucking the Montreal trend or is Toronto still an attractive site for data centres? If so, what are the key benefits of locating in the GTA?
DFT’s GTA data centre plan
According to DFT president and CEO Chris Eldredge, the Vaughan facility will be the first DFT data centre to utilize the company’s latest design. The DFT data centre will be built out as a multi-tenant wholesale facility consisting of 12 computer rooms in the first phase and 23 in total.
The facility will support a load of up to 46 megawatts with power densities ranging from 100 to 300 watts per square foot. High efficiency UPS technology and onsite diesel generator backup will support options for redundancy ranging from N to 2N.
The design incorporates localized indirect air-to-air heat exchangers instead of a centralized chilled water plant to take advantage of Vaughan’s cooler climate.
Multiple fiber link options will be available and easy access to downtown interconnection hubs (such as 151 Front Street) are included in DFT’s telecommunications plans.
Though DFT’s site selection criteria were not made publicly available, the price of the Toronto Star plant may have been a factor the decision for the GTA. Torstar, the owner of the Toronto Star, has said the sale price was $54.2 million for a plant that was originally valued at approximately $400 in 1992.
The Canadian advantage
Canada ranked sixth on the Cushman & Wakefield Data Centre Risk Index in 2016. This ranking is based on risk factors such as energy cost, international Internet bandwidth, ease of doing business, corporation taxes and water resources. Canada carries low risk region for natural disasters, crime and terrorism.
Eastern Canada is generally cooler than most cities in the USA. Average temperatures range from 21c in July to -9c (Montreal) and -3c (Toronto) in January. This can be an advantage as it allows “free cooling” using outdoor air to cool the server infrastructure. Optimizing cooling systems helps to cut operating costs.
Toronto and Montreal are both well served by multiple carriers and network service providers. There are also Internet exchanges in Toronto (151 Front Street and 45 Parliament Street that host 218 members and 464Gbps peak traffic) and Montreal (625 René-Lévesque Blvd. West with 55 members and 51Gbps peak exchange traffic).
The GTA, however, is larger than the Montreal area and serves as the business centre of Canada. It is the fourth largest city in North America and is consistently ranked as one of the world's most livable cities. According to the Toronto Foundation, the GTA is projected to grow to approximately 7.1 million people by 2019 (compared to 4.5 million for Montreal). Toronto has more than 89,000 businesses and a large, highly-skilled, multilingual workforce of 1.4 million people.
Chris Eldredge said that Toronto was selected for the DFT data centre because it is “the hub of Canadian business and one of the largest markets in North America.” He also argued that “Toronto’s pro-business environment makes the city an ideal destination for enterprise businesses and a perfect location for DFT's first Canadian data centre. This was a strategic move for DFT, largely driven by customer and market demand.”
The Toronto-Waterloo high tech corridor
One potential GTA advantage is that it is part of the emerging Toronto-to-Waterloo innovation corridor.
According to Startup Toronto, there are more than 15,000 technology companies employing more than 200,000 people along the 100Km corridor – creating the second largest technology cluster in North America. This area has the potential to become a technology supercluster, according to a report produced by McKinsey & Company for Invest Toronto. The report states that a global innovation hub has the potential to deliver a $50 billion increase in direct equity value, $17.5 billion in direct annual GDP, and more than 170,000 high-quality jobs by 2025.
Access to local advanced data centre facilities deliver a significant boost to an innovation ecosystem and incent businesses to locate nearby.
Ontario power costs
A well-publicized concern regarding Ontario infrastructure has been the higher cost of electricity as compared to other Canadian provinces, and Quebec in particular.
A recent article in the Globe and Mail reported that electricity prices in Ontario are significantly higher than Quebec. A comparison of 2016 residential monthly rates, for example, puts Montreal at $55.02 and Toronto at $142.40 (2.6 x Montreal). Although residential prices are not the same as commercial contracts, they do provide an indication of cost differences.
It should be noted that Ontario power is still less expensive than it is in cities such as Boston, which sits at $209.78 (almost 1.5 times more costly than Toronto), or New York at $226.58.
Direct cost is not the only consideration. Approximately 24 percent of Ontario’s power is hydroelectric which is clean energy with low greenhouse gas emissions. One advantage for Montreal is that more than 99 percent of the electricity produced by Hydro-Québec comes from renewable resources, largely hydroelectric.
Efficient use of power is also an important factor that the provider, not region, has control over. DFT claims the Toronto data centre will deliver Power Usage Effectiveness (PUE) of 1.25 annualized at full capacity. PUE is the ratio of total power consumed by the facility to power used by IT infrastructure; DFT’s respectable PUE is due in large part to reduced energy consumption associated with free air cooling. (facility power consumption includes lighting, cooling, UPS and other equipment, pumps and air conditioning).
Although the range of PUE values for data centers can vary widely, the industry average tends to be around 1.8. Data centres that focus on advanced technologies to improve efficiency can achieve 1.2 or less (e.g., Microsoft’s average PUE for new datacenters is 1.125). These numbers should only be used as a rough measure of efficiency.
The bottom line
Canada is an excellent host for world-class data centres. Both Toronto and Montreal are desirable locations that provide exceptional operating environments and business opportunities.
While Montreal and Toronto have many features in common, the GTA is home to more businesses and has greater expectation for future population growth. Data centre providers in the GTA are also well-positioned to benefit from the Toronto-Waterloo innovation corridor.
The GTA continues to be a good choice for a data centre but the decision would be much easier if electricity was less expensive.