Wary of cryptocurrency mining centres, some Quebec municipalities impose 90-day ban

A Quebec regional council has instituted a temporary ban on data centres that mine cryptocurrencies, as Brome-Missisquoi officials say the businesses bring few jobs and consume large amounts of energy.

A regional council in Quebec's Montérégie region has passed a three-month ban on cryptocurrency mining centres

Cryptocurrency mining centres run computers that solve math problems in exchange for digital currency. Access to cheap energy is crucial because the computers are plugged in at all times and need to stay cool. (Philippe Dubois/Radio-Canada)

As cryptocurrency mining companies look to take advantage of Quebec's low-cost energy, they are being courted by many municipalities eager for their business. 

But one Quebec regional council is taking a more cautious approach.

Officials in Brome-Missisquoi, in Quebec's Montérégie region, say they can't see the benefit of having cryptocurrency miners in their communities.

So they've imposed a three-month ban that prohibits the creation, and expansion, of data mining centres in their region.

The motion was approved unanimously Tuesday by mayors of the Brome-Missisquoi MRC Council.

"During that time, the council will think about adopting a rule to better formulate construction permits for these types of businesses in our territory," Robert Desmarais, director general of the MRC, told Radio-Canada.

Moratorium could be extended, council says

Bitfarms, a company specialized in mining cryptocurrencies, owns three sprawling centres in the area: in Notre-Dame-de-Stanbridge, Cowansville and Farnham.

A smaller company also operates in nearby Bromont.

Cryptocurrency miners have been drawn to Quebec and other parts of Canada for the cheap energy costs. (Cryptoglobal)

Desmarais said the operations extract a heavy toll from the community and have little upside.

"These centres occupy quite large spaces, create few jobs, have an extremely high demand for electricity and cause noise pollution because it takes extremely strong fans to remove the heat that is generated by the computers in the warehouses," he said.

The moratorium could be extended to allow the council to consult experts on how to legislate the issue.

"At this moment, the council doesn't see positive social, economic or environmental benefits from that kind of business," said Desmarais.​

Access to cheap electricity critical

Cryptocurrency mining centres are essentially spaces filled with computers that solve math problems in exchange for digital currency. 

The more computing power the companies throw at the system, the better their chances of being rewarded with bitcoin, or other digital currencies.

Access to cheap energy is crucial because the computers must be plugged in at all times and keeping them cool requires a lot of electricity.

Bitfarms is expected to set up shop in Sherbrooke in the coming months, promising to invest $250 million and create 250 jobs.

Desmarais, however, said that the companies in Brome-Missisquoi mostly set up warehouses to house the computers to mine for cryptocurrencies. "In those cases, there was very little job creation," he said.

An interior view of U.S. bitcoin mining company Bitfury's mining farm near Keflavik, Iceland. (Jemima Kelly/Reuters )

Hydro-Quebec considers raising rates

Hydro-Quebec has also expressed concerned by the growing industry's power needs.

It said it had received about 100 demands from digital-currency entrepreneurs, totalling 10,000 megawatts of power. That represents one-quarter of Hydro-Quebec's total capacity, which is estimated at 40,000 megawatts.

"A phenomenon like that, at Hydro-Quebec, we haven't see that very often. We've practically never seen that," said Marc-Antoine Pouliot, a Hydro-Quebec spokesperson.

Hydro-Quebec said it is considering raising its rates for cryptocurrency miners.

It is presently working on directives to determine which projects will be approved. A precise framework could be unveiled in the coming weeks, Pouliot said.

With files from Charles Beaudoin and Radio-Canada