{"id":5462,"date":"2023-01-04T18:16:44","date_gmt":"2023-01-04T18:16:44","guid":{"rendered":"http:\/\/ci02b487dad0002618"},"modified":"2023-01-04T18:16:44","modified_gmt":"2023-01-04T18:16:44","slug":"canada-cracking-down-on-bitcoin-mining","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/business\/canada-cracking-down-on-bitcoin-mining","title":{"rendered":"Canada Has Declared A Local War On Bitcoin Mining"},"content":{"rendered":"
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North America became the leading hub of bitcoin mining activity<\/a> after China\u2019s abrupt ban in May 2021. While the United States has grabbed most of the news headlines and a significant portion of investor attention, Canada has also solidified its role as a global leader in mining. From industrial<\/a> mining farms to off-grid<\/a> guerrilla mining operations, Canada is home to miners of all stripes.<\/p>\n

But the final months of 2022 saw several provinces target bitcoin miners and suspend any new grid connections while \u201cenvironmental assessments\u201d were initiated. This article provides an overview of the localized changes in regulatory posture toward miners.<\/p>\n

Mining Regulations In Canada<\/h2>\n

In late 2022, Hydro-Quebec announced its proposal for the province to stop selling cheap power to cryptocurrency miners, as reported<\/a> by The Wall Street Journal. The proposal called for the Canada Energy Regulator to suspend the allocation of 270 megawatts requested by cryptocurrency miners. Bitcoin miners in Quebec already recognize<\/a> that local regulations are too restrictive for easy growth, but this new proposal could make mining in the province even harder.<\/p>\n

Right after Thanksgiving, Manitoba announced<\/a> its plans to halt any new electric grid connections for cryptocurrency mining operations. The suspension will last 18 months from November 2022 to allow for a review of the externalities from the mining industry\u2019s energy demands, according to the province\u2019s finance minister. The 37 currently-operating mining facilities in Manitoba will not be affected for now. But recent requests for new connections from 17 different operators have been suspended, according to CBC<\/a>.<\/p>\n

Just before Christmas, British Columbia made headlines<\/a> for its efforts to stop mining growth to assess the environmental impacts of cryptocurrency mining operations. An 18-month moratorium has been placed on accepting any new requests for electrical grid connections exclusively from bitcoin mining companies. The province said at the time that 21 applications that were pending approval have been suspended. Assessing how bitcoin mining affects the province\u2019s \u201cenvironmental goals\u201d is the stated reason for B.C.\u2019s 18-month suspension.<\/p>\n

Before these grid connection limitations, Canada had long stood as a global hub for cryptocurrency growth generally and bitcoin mining activity in particular, with a loose estimate of 7%<\/a> of global hash rate operating within its borders. But several localities are starting to make miners feel not so welcome. Two is a coincidence, three is a trend, as the adage says.<\/p>\n

All the way at the top of the Canadian government, the current prime minister, Justin Trudeau, has made it no secret that he frowns on the entire cryptocurrency industry. After his conservative counterpart Pierre Poilievre voiced strong support for Bitcoin, Trudeau wasted no time firing back by calling<\/a> his rival\u2019s views \u201cirresponsible\u201d and cryptocurrency \u201cvolatile.\u201d From his personal Twitter, however, Trudeau has never tweeted about crypto, bitcoin or mining.<\/p>\n

The Canadian Mining Landscape<\/h2>\n

Mining discourse generally references \u201cNorth America\u201d collectively or \u201cthe U.S.\u201d individually. But Canada plays a significant role in bolstering the hash rate staying online across the North American region. And, for the most part, Canadian miners endure much harsher climates than their southern counterparts. For example, Upstream Data CEO Steve Barbour shared pictures<\/a> on Twitter of the underappreciated, destructive effects of harsh Canadian weather on bitcoin mining operations. Frozen cables, iced hardware and large snow drifts do not make for ideal mining conditions.<\/p>\n

But some of the most well-known public and private mining companies operate or are headquartered in Canada. For publicly-traded firms, the list includes Bitfarms, SATO Technologies, Hut 8 and more. The roster of private companies based or operating in Canada includes Compass Mining, Bitfury, Upstream Data and others. Nearly all of these brands are quasi-household names in the bitcoin economy and often play key roles in advocating for and educating about Bitcoin. Canada\u2019s footprint in the bitcoin market is not small.<\/p>\n

Reacting To Regulatory Changes<\/h2>\n

Local hostility to operational bitcoin mining expansions may be recent news in Canada, but the broader industry is no stranger to this sentiment. The entire industry banded together<\/a> to vociferously oppose<\/a> a proposed two-year moratorium in New York for fossil-fuel-powered mining expansion projects. In late November 2022, the bill passed<\/a>. The move was cheered<\/a> by other left-leaning politicians. And Canada seems to be copying their playbook.<\/p>\n

Canada\u2019s new posture toward miners also imitates another international mining hotspot: Kazakhstan. After absorbing an abundance of mining activity that left China, Kazakhstan started proposing<\/a> power consumption limitations for new mining activity in October 2021.<\/p>\n

So, how are Canadian miners reacting?<\/p>\n

News of Quebec\u2019s proposal to suspend any new grid connections was widely shared<\/a> among Bitcoin social circles on Twitter. Unsurprisingly, the chatter was uniformly negative and critical.<\/p>\n

Upstream Data\u2019s Barbour was not altogether shocked, though. Taking to Twitter, he noted<\/a> that Quebec is \u201conce again\u201d censoring bitcoin miners. Why are the proposed grid connection limitations unsurprising? Because miners \u201ccompete with utilities,\u201d according to Barbour. <\/p>\n

\u201cExpect increasing discrimination,\u201d he tweeted.<\/p>\n

Despite changing regulatory sentiment, some of Canada\u2019s biggest miners still plan to expand. Bitfarms said it \u201ccontinues to look to expand its operations in Qu\u00e9bec and add more jobs across the region\u201d in a press release<\/a> published shortly after news of Hydro-Quebec\u2019s proposal broke. Quantifying Bitfarm\u2019s impact on the local economy, the press release added, \u201cBitfarms has invested over CAD$350 million in Qu\u00e9bec since its inception and currently employs over 100 employees.\u201d<\/p>\n

Canada\u2019s Choice<\/h2>\n

Political favor or hostility toward Bitcoin ultimately means very little for the long-term success of the network. In the short term, however, regulatory limitations can make life very difficult for mining companies trying to process transactions and find new blocks. Any regulatory opposition from Canada is highly unlikely to rival China\u2019s all-out ban from 2021. But multiple localities suspending all new requests for grid connections is extremely disruptive all the same.<\/p>\n

Canadian provinces now face a choice: risk losing hash rate to other jurisdictions or embrace mining and the heavily-documented socioeconomic benefits it affords. <\/p>\n

This is a guest post by Zack Voell. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Multiple local governments across Canada have started to make life much harder for bitcoin miners.<\/p>\n","protected":false},"author":2801,"featured_media":5463,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[189,1528,969,422,1749,219],"class_list":{"0":"post-5462","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-bitcoin-mining","9":"tag-canada","10":"tag-energy-consumption","11":"tag-feature","12":"tag-north-america","13":"tag-regulation"},"author_data":{"id":2801,"name":"Zack Voell","nicename":"zack-voell","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/752422daad6c455e7c730e136464e6c80ff641be43afa9e92230dfd835257e41?s=96&d=robohash&r=g"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/bitcoin-bear-market.png","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/5462","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2801"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=5462"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/5462\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/5463"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=5462"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=5462"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=5462"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}