Ontario unveils data centre framework with no municipal veto power

Ontario will not give municipalities veto power over AI data centre approvals, Premier Doug Ford announced Thursday during a presentation of the province's new data centre playbook.

Under the framework, data centres must pay the full cost of their electricity and fund their own generation and transmission upgrades. No existing ratepayers will absorb these costs, the province said. The government will also not offer financial incentives to attract companies.

For larger data centres — one megawatt or higher — the province plans to establish a new electric rate class that will be higher than existing industrial rates, prioritizing projects that use closed-loop systems to minimize water usage.

When pressed on whether municipal councils could block projects facing local opposition, Ford said he would "sit down with the mayor and council and consult with the community" but favored "a willing host." He rejected the premise that communities should be able to refuse data centres outright.

"Either lead the way around the world because it's happening no matter what and we be the leaders, and responsible leaders, and get community benefits, and we get tens of thousands of jobs, $122 billion of investment to drive our economy, or might as well just close up the door," Ford said.

The announcement comes as municipalities across Ontario grapple with a surge in data centre applications. Oakville recently enacted a one-year moratorium on new data centres, and Mississauga is considering one. Critics have repeatedly raised concerns about heavy water use and noise generation at large-scale facilities.

The province said its framework will serve as a key enabler of its artificial intelligence strategy, expected to produce $122 billion in economic growth by 2035.