What Happened

Terrace city council has directed staff to investigate whether data centres should be classified as a distinct zoning category, a move designed to introduce additional municipal and public review before any future facility is approved within city limits. The motion was tabled on June 8 by Councillor James Cordeiro, who argued that the current industrial zoning framework allows data centres to be approved without public hearings, leaving residents without a voice in the process. Councillor Inder Dhillon seconded the motion, emphasizing that the goal is to ensure future decisions prioritize community interests and transparency regarding the impacts of these large-scale facilities. Mayor Sean Bujtas supported the investigation, noting that while no specific project is currently on the council’s desk, the city lacks the mechanisms to give residents input on such developments. This regulatory shift comes as Vancouver-based entrepreneur Christopher Chong proposes the Skeena Data Centre, a preliminary vision located near the Skeena Industrial Development Park and the Northwest Regional Terrace-Kitimat Airport. Cordeiro’s motion specifically questions whether data centres should require site-specific council approval, similar to how other specialized uses are regulated. The investigation aims to define and regulate data centre use separately from standard industrial zoning to address community concerns about grid stability and environmental impacts. Cordeiro clarified that the intent is not to judge the merits of any particular data centre or comment on the ethical use of AI, but rather to establish a fair review process. The city’s Development Services Department will now examine the bylaw amendments needed to implement this new scrutiny. This proactive step ensures that Terrace can manage the economic opportunities of data centres while mitigating potential risks to the local infrastructure and community.

Why It Matters

The decision by Terrace to seek new zoning categories for data centres highlights a growing tension between regional economic diversification and local infrastructure capacity. As data centres require substantial power and water resources, municipalities across British Columbia are re-evaluating how they approve these energy-intensive facilities. By moving to require site-specific council approval and public input, Terrace is attempting to balance the economic benefits of attracting tech investment with the need to protect community interests. This shift could set a precedent for other smaller cities in the province that are considering similar large-scale industrial projects. The move also reflects a broader trend of local governments seeking more control over land use decisions that have significant environmental and community impacts. Without such regulations, data centres could be approved under existing industrial bylaws, bypassing public scrutiny and potentially straining local resources. The investigation will determine whether Terrace can effectively manage the integration of data centres into its urban and industrial planning framework. This process is critical for ensuring that any future development aligns with the city’s long-term goals and infrastructure capabilities.

Local Vancouver / Burnaby Context

While Terrace is a smaller city in the Bulkley-Nechako region, its approach to data centre regulation reflects broader concerns in British Columbia regarding the impact of large-scale industrial projects on local communities. In Greater Vancouver, the approval of data centres has been a contentious issue, with residents and local governments raising concerns about power grid stability, water usage, and environmental impacts. The Skeena Industrial Development Park, where the proposed Skeena Data Centre is located, is situated near the Northwest Regional Terrace-Kitimat Airport, an area that has traditionally been focused on mining and forestry. The diversification of the local economy into tech infrastructure is seen as a potential opportunity, but it also requires careful planning to ensure that the benefits are shared and the risks are managed. In Burnaby and Vancouver, the approval of similar projects has often involved extensive public consultation and political debate, highlighting the need for clear regulatory frameworks. The city of Terrace’s move to investigate zoning changes is a proactive step that could influence how other municipalities in the province handle the growing demand for data centre space. The involvement of Vancouver-based entrepreneur Christopher Chong in the Terrace project also illustrates the cross-regional nature of tech investment in British Columbia. As data centres continue to expand, local governments will need to balance economic development with community concerns, a challenge that is particularly acute in regions with limited infrastructure capacity.

Market Impact

The potential regulation of data centres in Terrace could impact land values and development feasibility in the Skeena Industrial Development Park and surrounding areas. If new zoning categories are established, it may increase the cost and complexity of developing data centres, potentially slowing down the pace of investment in the region. However, it could also provide greater certainty for developers by clarifying the approval process and requirements. For local residents, the move may lead to more transparent decision-making and greater community input on future projects. The impact on the broader real estate market in Terrace is likely to be limited, as data centres are a specialized industrial use. However, the success of the Skeena Data Centre project could influence future investment in the region, potentially attracting related tech infrastructure and creating new economic opportunities. The regulatory changes could also affect the competitiveness of Terrace as a location for data centres compared to other regions with more streamlined approval processes.

Investor / Buyer Takeaway

- Investors should monitor the outcome of Terrace’s zoning investigation, as new regulations could impact the feasibility and timeline of the Skeena Data Centre project.

- Buyers interested in industrial land in the Skeena Industrial Development Park should be aware that future development may require site-specific council approval and public consultation.

- Developers should consider the potential for increased scrutiny and regulatory requirements when evaluating data centre opportunities in smaller British Columbia cities.

- Local residents and stakeholders should engage with the city’s planning process to ensure their concerns about infrastructure and community impact are addressed.

- The move highlights the importance of understanding local zoning and approval processes when investing in specialized industrial assets in emerging tech hubs.

Builder / Developer Perspective

For builders and developers, the investigation into data centre zoning in Terrace introduces a layer of uncertainty regarding the approval process. Currently, data centres fitting into industrial zoning can be approved without public hearings, which simplifies the development pathway. However, the proposed changes would require site-specific council approval and potentially public hearings, adding time and cost to the development process. Developers will need to assess whether the benefits of locating in Terrace outweigh the potential regulatory hurdles. The move also suggests that local governments are becoming more proactive in managing the impact of large-scale industrial projects, which could affect development strategies in other regions. Developers should engage with city staff and community stakeholders early in the planning process to address concerns and build support for their projects. The outcome of Terrace’s investigation could influence how developers approach data centre opportunities in other smaller cities in British Columbia.

Risk Factors

- Regulatory delays: New zoning categories and approval processes could slow down the development of data centres in Terrace.

- Community opposition: Increased public scrutiny may lead to greater opposition to data centre projects, impacting their feasibility.

- Infrastructure constraints: Concerns about grid stability and water usage could limit the scale and scope of data centre development.

- Policy uncertainty: The outcome of the zoning investigation is not yet known, creating uncertainty for investors and developers.

- Competitive disadvantage: Stricter regulations in Terrace could make it less attractive for data centre investment compared to other regions.

BurnabyHouse Insight

Terrace’s move to regulate data centres is a clear signal that smaller cities in British Columbia are no longer passive recipients of tech investment but are actively shaping how these facilities are integrated into their communities. The Skeena Data Centre project, proposed by Vancouver-based entrepreneur Christopher Chong, is just one of many potential developments that could transform the local economy. However, the city’s decision to prioritize community input and transparency reflects a broader trend of local governments seeking to balance economic growth with infrastructure capacity and environmental sustainability. For investors and developers, this means that the era of rapid, unregulated expansion of data centres in smaller cities may be coming to an end. Instead, success will depend on the ability to engage with communities, address local concerns, and navigate evolving regulatory landscapes. Terrace’s approach could serve as a model for other municipalities facing similar decisions, highlighting the importance of proactive planning and community engagement in the tech infrastructure boom.