Ontario wants data centres to pay full electricity cost under new rules

The Ontario government has released a draft framework for data centre development that would require operators to pay full price for the electricity they consume. The province also plans to base approvals on three criteria: economic development, digital sovereignty, and community benefits.

The so-called Data Centre Playbook is not yet final. The government opened a 30-day public consultation period to collect feedback, after which it will publish the final version, the province said in a news release.

Ontario will offer only “non-financial support to attract investments,” the government statement said. That includes things like “leveraging Ontario’s existing strategic advantages such as a clean and reliable electricity system, ample land space, cool climate, and skilled workforce,” according to the release.

The move comes as AI companies rush to build infrastructure in the province, driving a surge in data centre proposals. But backlash is mounting. Local residents have raised concerns about energy use, environmental impact, and whether the projects deliver lasting economic benefits. Municipalities are responding, often with ad hoc bans.

Oakville enacted a one-year moratorium on new data centre developments. Mississauga is set to vote on its own pause. Hamilton voted down a similar proposal last month.

Other Canadian provinces have taken sharply different approaches. Manitoba rejected a 141-hectare hyperscale data centre in June, with Premier Wab Kinew saying the project was not in the province's interest. Alberta has actively courted developers. Meta recently announced it will invest $13 billion to build a hyperscale data centre north of Edmonton.

Ontario is trying to chart a middle path. The final playbook will determine exactly where that leads.