Ontario Construction News staff writer
The Ontario government is proposing new rules for data centre development that would require projects to deliver economic and community benefits while paying the full cost of the electricity they use.
The provincial government released its proposed Data Centre Playbook Thursday, saying it will help attract data centre projects while protecting electricity ratepayers, strengthening digital sovereignty and ensuring Canadians’ data remains in Canada.
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The framework is also an early component of the province’s forthcoming artificial intelligence strategy. Ontario says wider adoption of AI could generate $122 billion in economic growth by 2035 and create more than 17,000 new jobs annually.
“Ontario has a choice: we can build the economy of the future and ensure Canadians’ data remains in Canada, or we can get left behind and risk Canadians’ data being sent to the U.S. and elsewhere,” Premier Doug Ford said at a press conference. “Any data centre investment will need to invest significantly in local communities and pay more for electricity so no energy costs are passed on to hardworking families,” he said.
The framework follows changes made under the Protect Ontario by Securing Affordable Energy for Generations Act, which give the minister of energy and mines final authority over which large-load facilities, including data centres, can connect to the provincial electricity grid.
The proposed playbook is based on three pillars: economic development, data security and digital sovereignty, and community investment.
Projects would be assessed on their potential to generate investment, jobs and tax revenue, support Ontario and Canadian supply chains and improve business productivity.
They would also have to demonstrate how they would protect critical data and personal information and advance Ontario and Canada’s digital sovereignty.
The province said projects must provide significant benefits to host communities, including contributions to infrastructure, job creation, training and future economic growth.
Ontario said it will provide only non-financial support to attract data centre projects, relying on advantages such as its electricity system, available land, climate and skilled workforce.
Data centres would be required to pay for their impact on the electricity system. Proposed measures include encouraging facilities to build their own power generation and creating a separate electricity rate class for large new data centres.
Under the proposal, new data centres larger than one megawatt would pay a higher electricity rate than large industrial users.
The government said the measures are intended to ensure data centre development does not increase electricity costs for households.
Environmental considerations will also factor into approvals. Ontario said projects must meet provincial standards for water consumption and noise, with preference given to facilities using closed-loop systems that require virtually no water during operation.
“As demand for digital infrastructure continues to grow at an unprecedented pace, our government is taking bold action to ensure Ontario’s interests remain protected and prioritized,” Economic Development, Job Creation and Trade Minister Vic Fedeli said.
“The Data Centre Playbook will serve as a strategic assessment tool, ensuring that projects looking to break ground in Ontario offer significant economic, security and community benefits,” he said.
Ontario is home to nearly 450,000 technology workers at 26,000 businesses, including more than 1,600 AI-related companies, according to the province.
The government said Ontario has secured tens of billions of dollars in technology investment since 2018 in areas including AI, fintech, cybersecurity and quantum technologies.
Public comments on the proposed framework are being accepted through the Environmental Registry of Ontario and Ontario Regulatory Registry until Sept. 12.
Feedback will be used to refine the framework before the final Data Centre Playbook is released as part of Ontario’s broader AI Industrial Strategy.
