Ford rules out incentives as connection requests double since March
Ontario data centres will have to cover the full cost of their electricity and pay into a new rate class set higher than other large industrial users, under a framework Premier Doug Ford released Thursday in Guelph.
As reported by The Canadian Press, Ford said the province will not offer financial incentives to draw the facilities, providing only "non-financial support" such as permit help.
Any data centre counting on "a freebie," the premier said, will find it "not happening."
Under the framework, large data centres cannot pass their energy costs to nearby ratepayers, the government said, and would fall under a separate rate class priced above existing industrial programs.
"No costs are passed on to the hard-working Ontario families," Ford said, per CBC News.
The government is pitching the sector as an economic driver.
CBC News reported the framework will serve as a "key enabler" of the province's artificial intelligence strategy, which the government projects will deliver $122bn in economic growth by 2035 and create 17,000 jobs a year.
Approvals will hinge on local benefits such as job creation, training and infrastructure, along with investment in community centres, parks and roads, Ford said.
The Independent Electricity System Operator reported roughly 7,000 megawatts of data centre-related connection requests, double the March figure and more than a quarter of the province's peak demand of about 25,000 megawatts.
Most projects remain in early stages and the numbers can shift as they pause or withdraw, the operator said.
By 2035, data centres could account for about 13 percent of new electricity demand in Ontario, according to The Canadian Press.
The framework rests on three pillars, CBC News reported: economic development, data protection and sovereignty, and community investment and public confidence.
Ford said the rules will "ensure Canadians' data remains in Canada."
New projects must minimize environmental impact, the framework says, with the province favouring closed-loop cooling that recirculates water.
The minister of economic development, Vic Fedeli, said the province will "make certain [to] give priority to the data centres that use a closed loop system," per CBC News.
The announcement lands as municipalities weigh their own limits.
Oakville became the first Ontario municipality to enact a one-year moratorium on Tuesday, and Mississauga is set to vote on its own pause in September, according to CBC News.
Ford likened those local pauses to "NIMBYism" and called them hypocritical.
"We're going to use all the data, we're going to use everything, but we aren't going to put it in our backyard," he said, as reported by The Canadian Press.
Residents have raised concerns about noise, water, heat and air pollution, and about strain on the grid, the wire service noted, and more than 5,000 Toronto residents have signed petitions, CBC News reported.
Green Party of Ontario leader Mike Schreiner said the playbook "falls short."
Ford leaned on "abstract language and reassuring language" while offering "no details, no specifics, no strong regulations," he told CBC News, such as barring any data centre that skips a "closed loop water system."
His party will keep calling for a moratorium until stronger rules are in place, he said, adding, "we want to make sure people and communities are in control, not tech billionaires and fossil gas giants."
Some observers see the guidelines as a starting point.
CBC News reported that technology analyst Carmi Levy sees the rules bringing consistency to a process once left to individual councils.
Levy called the current setup "the Wild West," warning of "a patchwork of communities" where some welcome data centres and others refuse them.
He expects provincial and federal legislation to follow, he said, especially after Prime Minister Mark Carney released a national AI strategy in June, calling a framework "the first step" before "a comprehensive law."
Strathroy-Caradoc mayor Colin Grantham, an outspoken opponent, welcomed the direction but said it does not change his view on urban projects.
He called the framework a "first step" and told CBC News, "We need guardrails in terms of environmental impact, energy usage, water usage and where they can happen."
His own position, he added, "hasn't changed against data centres in an urban area."
Ontario passed a law last year giving the energy minister power to prioritize and approve connection requests from large data centres, according to The Canadian Press.
