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In the southeast mountains of B.C., a company that has been mining Bitcoin since 2022 plans to transform its facility in Christina Lake into an artificial intelligence data centre.
DMG Blockchain Solutions announced on June 1 that it signed a letter of intent to provide AI data centre processing power from its Christina Lake location to an undisclosed tenant.
“They aren’t the best neighbours,” said Grace McGregor, a director with the Regional District of Kootenay Boundary, representing the small municipality of Christina Lake, about DMG Blockchain Solutions.
McGregor told CBC’s Radio West that residents and local government are frustrated with the company after numerous, still unresolved, bylaw infringements.
“Frankly, we try to talk to them. They don’t want to talk …They don’t answer us,” said McGregor.
DMG Blockchain Solutions plans to outfit its Bitcoin mining facility with the servers and cooling equipment needed to operate an AI data centre. Then it will rent out its servers and bandwidth to an AI company, that is currently unnamed, with a goal of starting operations by Dec. 31.
McGregor is worried about how the building’s transformation from bitcoin mining facility to AI data centre will impact the environment – specifically the water table – and residents of Christina Lake.
In an interview with CBC’s Radio West, Sheldon Bennett, CEO of DMG Blockchain Solutions, said the company is keen to participate in a public hearing and has been in communication with the federal Ministry of Artificial Intelligence and Digital Innovation. He also said he understands the environmental concerns, but said they are unwarranted.
“Data centres, traditionally, and mainly in the U.S., not so much in Canada, do have a reputation of using a lot of water in their cooling systems,” said Bennett.
Bennett said DMG Blockchain’s plan to retrofit the Bitcoin mine into a data centre in Christina Lake will use modern technology that is water-sparing, in a closed-loop system. He said the data centre will purchase a water and glycol mix that it will use as a cooling solution for about six years before it is recycled and replaced.
‘They have made Swiss cheese out of the building,’ says official
McGregor said since 2018 DMG Blockchain Solutions has been renovating its building without proper permits and is breaking local bylaw zoning codes.
In 2019, the Regional District of Kootenay Boundary stated it notified the owner of DMG Blockchain Solutions by phone and mail that it did not have a valid building permit for the alterations being made to its industrial building in Christina Lake.
The district then issued stop-work orders and told the owner to apply for a building permit.
The regional district said an application for a development permit was subsequently submitted, but it was incomplete, could not be processed, and the building permit could not be issued.
“To date, we have not received an application for a building permit for the alterations taking place,” said Brian Champlin, manager of building inspection services in a staff report from June 2024.
McGregor said the building and property, as they are now, do not have valid permits for the alterations that have already been made, and are in non-compliance with the area’s zoning.
“They have made Swiss cheese out of the building,” said McGregor in a Facebook post discussing the DMG Blockchain building and the alterations that have been done to it.
In August 2024 the regional board of directors passed a resolution to place a notice on the property’s title, which aims to advise those with potential interest in the property and future buyers of the regulations that have been contravened.
The regional district said it is now pursuing additional enforcement options.
“They’re still in violation of the regional district guidelines,” said McGregor.
After hearing news of the plans, residents of Christina Lake launched a petition opposing the AI data centre. Residents are calling for an environmental assessment and public hearing before any more renovations on the building are done.
“The community knows nothing about this. The regional district knows nothing about this. Therein lies our concern,” said McGregor.
CBC News reached out to Bennett, CEO of DMG Blockchain Solutions, for comment on the alleged permitting and zoning contraventions, but did not receive a response by deadline.
B.C.’s health minister Adrian Dix is pictured during an announcement regarding healthcare in Vancouver, British Columbia on Thursday, September 12, 2024. (Ben Nelms/CBC)Federal push for AI
The Christina Lake announcement comes amid a push for sovereign AI technologyfrom the federal government, and mounting opposition from Canadian residents who fear the repercussions of rapid data centre growth across the country.
“I think there’s a lot of concern across rural B.C. about the future of our province and the disruption that AI and data centres can cause if we don’t handle them,” said Adrian Dix, B.C.’s minister of energy and climate solutions.
He said people who are concerned about the boom in AI data centres should know the provincial government is tightly regulating both water and electricity usage.
Dix said the recently passed Bill 31 limits the amount of electricity that can go to AI and data centres. The legislation also bans allocating electricity for further bitcoin mining.
He said while there is a need for independent, sovereign AI data, B.C. is also tightly regulating access to its resources during the AI boom, and implores other provinces to do the same.