Vito Pilieci
12.19.2016

Internet giant Amazon Web Services has opened a cluster of data centres near Montreal due to the ready availability and cost of hydro-electric power in Quebec.

The company, which is notoriously secretive about its data centres, said there are now at least two data centres just outside Montreal to offer web-based services to the “Canada Region.” Canada joins 15 other regions around the globe from which Amazon is running data services on behalf of clients.

Teresa Carlson, vice-president of public sector with Amazon Web Services, said the cost and availability of hydro-electric power is ultimately what made Amazon choose Quebec as its Canadian home.

“We picked the area that we did because of the hydro power,” said Carlson. “We did find them (Quebec) to be very business friendly.”

Carlson said Amazon conducted a thorough review of various options within Canada, including Ontario, that involved looking at a number of factors, including the price of electricity. She also said Amazon is keen to source green energy where it can as the company is attempting to get all of its data centres on renewable energy sources.

The announcement is a boon to Quebec, which now finds itself at the forefront of cloud computing nationally. It’s an industry the province has been pursuing heavily, using its cheap hydro electricity as a prime attractant.

A page on the province’s Invest Quebec website spells out the benefits of setting up data centres in the province. It already secured one of the world’s largest data centres from French cloud computing giant OVH in 2013. That investment led to OVH setting up its North American research and development labs in the province in 2016. IBM, Bell Canada, Cogeco Data Services and many others have also recently opened data centres in the province.

While Amazon wouldn’t reveal how large the investment was that it made in its new Montreal facilities, U.K. newspaper The Independent reported in October 2015 that a comparable development in Dublin, Ireland, was valued at $280 million.

According to a recently released study by Persistence Market Research, companies will have spent more than $40.4 billion U.S. on the construction of new data centres around the globe this year. By 2024, that amount is expected to hit $96.5 billion as more services move to the cloud and more businesses demand it.

In Canada, Quebec is preparing itself to take advantage of that opportunity and the highly skilled, high-paying technical jobs it will bring.

“Significant projects like the one ‎being realized by Amazon Web Services represent the kind of large-scale investment that take Quebec a long way toward its goals in the digital world,” said Dominique Anglade,‎ minister of Economy, Science and Innovation in Quebec. “Indeed, this initiative will stimulate the development of cloud computing in Quebec, a key area that can be an engine for our province’s information technology and communication sector.”

Carlson promised outreach from Amazon in the months and years ahead to work with companies, colleges and universities through partnerships and various other initiatives in a bid to help foster more skill in the cloud computing sector.

The revelation that Quebec was chosen over other provinces to play host to Amazon’s data cluster comes at a time when Kathleen Wynne’s Ontario Liberal government is reeling from an energy policy that has sent electricity prices skyrocketing in recent years.

According to current statistics provided by Hydro Quebec, large commercial electricity users pay 5.17 cents per kWh in the province, while comparable businesses in Ontario pay around 13 cents per kWh, the highest rate in Canada. Hydro Quebec pricing is largely cited as the de facto industry standard.

Patrick Brown, leader of Ontario’s Progressive Conservative party, was quick to jump on the news as more evidence that the province’s electricity prices are making it less competitive for big business investments and could hamper its opportunities when it comes to high-tech.

“I’m envious of Quebec. It’s a competitive destination for jobs. It’s a story we’ve heard all to often, and we need to rectify it,” said Brown. “These are jobs that could have gone to Ontario. We can do better in this province.”

Brown said the price of electricity for high-usage commercial customers has climbed far too high over the past decade due to Liberal energy policies.

Douglas Porter, chief economist and managing director of BMO Financial Group, had similar concerns when it came to his take on the current state of electricity pricing in Ontario.

“There is little doubt that Ontario’s relative position has deteriorated markedly in recent years as a result of relatively large increases over the last couple years,” he said. “The most eye-popping number has been in the last 12 months alone, where we’ve seen a 15.2-per-cent increase in Ontario’s electricity prices.”

In November, Wynne publicly admitted that skyrocketing energy prices in the province were her “mistake” and vowed to do something about them in 2017. Wynne’s office refused to comment on the issue, deferring all inquiries to Ontario Minister of Energy Glenn Thibeault.

A spokesman for the minister, Dan Moulton, responded on behalf of Thibeault and blamed years of Conservative mismanagement prior to the arrival of the Liberal government in 2003 for today’s rising electricity prices.

“We know the costs associated with modernizing the badly neglected electricity system we inherited from the previous Conservative government remain a concern for some companies,” said Moulton. “We’re taking concrete action to reduce costs for businesses, like expanding the Industrial Conservation Incentive program to allow up to 1,000 new businesses to reduce their electricity bills by up to one-third. And we are taking action to reduce overall costs in the electricity system, including suspending new large, renewable procurements.“

He argued that commercial electricity rates aren’t as high as some have reported. Moulton pointed to a study released by the Ministry of Energy that states large commercial suppliers in Ontario cities such as Toronto and Ottawa were paying 8.35 per kWh for electricity as of May 2015, the most recent month for which the province has statistics.

Moulton also said that Ontario has a very good relationship with Amazon. The company just agreed to expand a warehousing facility that it has in Brampton, which could create as many as 700 jobs, he said. He also said the company has recently acquired office space that could fit as many as 800 employees in Toronto. Moulton pointed at other investments by major auto manufacturers.

However, an investment in a warehouse facility is a drop in the bucket compared to an investment in a data centre.

Amazon Web Services is the largest provider of cloud computing services in the world, accounting for more than 30 per cent of the global market. Cloud computing sees companies outsource information technology departments to another company, like Amazon, to host websites, run servers and handle Internet traffic for applications and video on a subscription basis.

In its most recent financial quarter, Amazon Web Services accounted for $3.23 billion U.S. in sales, a 55-per-cent increase over the $2.1 billion it accounted for during the same quarter last year.

http://www.montrealgazette.com/busin...770/story.html