Canada considers energy incentives to attract Bitcoin miners

Bitcoin miners are setting up new operations in Canada’s British Columbia, Quebec, Manitoba, Alberta and Labrador provinces, attracted by the country’s cool climate and abundant hydropower supply.

According to a report in Canada's National Post, many provincial governments in Canada are considering lowering interest rates to attract Bitcoin miners. The Labrador government is considering introducing new energy incentives to meet the potential service needs of Bitcoin and other "data center" processors.

The Quebec government tried new energy incentives, but due to high demand from bitcoin miners, the province has retracted the incentive for low electricity prices, even though demand for mining electricity continues to grow.

According to recent reports, Chinese Bitcoin mining farm owners are also looking for cheap electricity outside of China, and many Chinese Bitcoin miners have moved to Quebec and pay the local standard hydroelectric rates to mine.

Transformation from resource-intensive to knowledge-intensive economic model

Parts of Canada's north, where forestry and fishing industries account for much of the country's depleted resources, are seeking new ways to grow their economies sustainably.

Labrador, a remote but scenic eastern province, is not economically sustainable if its forestry and fisheries are depleted, but it has significant hydroelectric resources, including two large hydroelectric stations, Churchill Falls and Muskrat Falls.

Large hydroelectric dams may have made sense in a resource-driven economy, but they are now a fiscal and environmental burden, and governments are struggling to justify their spending, such as taking out a mortgage on the Muskrat Falls project in Labrador, which is still under construction.

The Labrador government has said its $12.7 billion commitment to the Muskrat Falls project is one of its biggest financial challenges. The Washington Post estimated the project’s first year of operations would cost $726 million.

The government’s energy plan promises to keep electricity prices at 13.5 cents per kilowatt-hour, but one bitcoin miner who asked not to be named told us that this would not affect competition among startups, although the largest mining companies could still buy electricity for as little as 3 to 4 cents.

However, just one year ago, a report from the Labrador Public Utilities Commission stated that demand for Bitcoin mining had clearly increased.

According to the Telegraph, “Data-driven businesses have expressed interest and willingness to leverage existing resources and build new transmission infrastructure to deliver more power to them in Labrador. They just want lower prices, regardless of where the power comes from.”

Editor-in-charge: Tang Jing