Data centres in Ontario will need to cover all their energy costs and could pay more for electricity than other industrial users, the government said Thursday as it faces mounting pressure from local lawmakers to bring in guardrails around the facilities powering the artificial intelligence boom.
Premier Doug Ford lauded data centres as the "way of the future" at a press conference in Guelph, but ruled out using financial incentives to lure new projects to Ontario.
"It's going to drive the world economy, there's trillions of dollars around the world being invested," Ford said while outlining the province's "playbook" to guide future data centre approvals.
"But if any data centre thinks they're coming into Ontario and getting a freebie: not happening."
Barrie's News Delivered To Your Inbox
By submitting this form, you are consenting to receive marketing emails from: Central Ontario Broadcasting, 431 Huronia Rd, Barrie, Ontario, CA, https://www.cobroadcasting.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact
Competition among large tech companies has fuelled a surge in demand for energy-hungry data centres, facilities lined with powerful computer chips used to train and operate increasingly complex AI models. Ontario has seen a major spike in data centre requests to connect to the grid.
The rush of new projects has led several Ontario municipalities, including Toronto, to press the province for clearer guidelines to assess the larger data centre projects.
Oakville became the first municipality in the province to enact a one-year data centre moratorium this week, with Mississauga set to vote on its own pause next month.
Ford likened those local moratoriums to "NIMBYism."
"I find it, I guess, hypocritical. That's the word. 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.
Residents backing the moratoriums have pushed for transparency about the possible noise, water, heat and air pollution associated with larger AI data centres. Concerns have also been raised about the potential for the facilities to strain the energy grid and drive up utility bills. Data centres have also become a proxy for broader critiques about the rise of artificial intelligence, from displacing jobs to the proliferation of misinformation.
Under Ontario's proposed framework, data centres would have to pay for all their energy and ensure costs aren't passed down to ratepayers in the area. Large data centres would also be subject to a new rate class, which would see them pay more than other large industrial energy users, the government said.
Only "non-financial support," such as the facilitation of permits, would be provided, the framework says. Data centres would have to "minimize environmental impacts," such as by using closed-loop cooling systems that recycle water.
Approvals would only be granted to projects if they deliver local benefits, such as investments in community centres, parks, and roads, Ford said.
Ontario passed a law last year to give the energy minister power to prioritize and approve connection requests from large data centres.
There are now roughly 7,000 megawatts of data centre-related requests to connect to Ontario's grid, double what was reported in March, the Independent Electricity System Operator said. That's more than a quarter of the entire province's peak demand of roughly 25,000 megawatts.
Most of the projects are in early stages and figures can fluctuate as projects withdraw, pause or advance, the IESO has said.
Data centres are expected to represent about 13 per cent of new electricity demand in Ontario by 2035.
This report by The Canadian Press was first published Aug. 13, 2026.
