Ontario Government Introduces Strict New Framework for Data Centres

The Ontario government has announced a new, stricter policy for data centres as demand for artificial intelligence (AI) infrastructure continues to grow rapidly. Under the new framework, new data centres in the province will be required to pay 100 per cent of their electricity costs, while the government will not provide cash incentives to attract these projects.

Premier Doug Ford’s government introduced the framework at a time when several Ontario municipalities, including Toronto and Hamilton, had been calling on the province for clearer guidelines to manage the rapid expansion of data centres. The Town of Oakville has even imposed a one-year pause on new data centre developments.

According to reports, there has been a major surge this year in requests from data centres seeking connections to Ontario’s electricity grid. Approximately 7,000 megawatts of demand is currently in the queue - nearly seven times the electricity demand of the entire city of Ottawa.

Under the new framework, new data centre projects will only be allowed to connect to the provincial grid if they meet strict conditions, including demonstrating economic benefits, providing value to local communities and protecting Canadian data.