Ontario Proposes Data Centre Approval Framework

According to Ontario's Environmental Registry notice, the province is considering a regulation under the Electricity Act, 1998 that would require new large data centres to obtain government approval before connecting or reconnecting to the grid. Facilities that do not meet the eventual requirements would be unable to connect or reconnect, the notice states.

The Ministry of Energy and Mines is also proposing a new rate class for large new data centres, using projects greater than 1 MW as an example threshold. The stated purpose is to ensure sector growth does not raise electricity bills for existing customers.

The Globe and Mail reported that Premier Doug Ford described the proposed threshold as applying to essentially every newly built AI-capable data centre. Ford also said developers would need to fund necessary infrastructure upgrades, while the provincial government ruled out financial incentives for construction, according to the newspaper.

BNN Bloomberg reported that Ford said Ontario would not offer new data centres a "freebie" and described the facilities as part of the "way of the future." The provincial proposal, however, remains subject to consultation and a final government decision.

BetaKit reported that the proposed playbook organizes approval assessments around three pillars: economic development, digital sovereignty, and community benefits. Ontario's consultation notice similarly states that the assessment would evaluate prospective facilities for their economic and strategic value to the province, communities, and Ontarians.

The Globe and Mail reported that the framework would also consider local economic benefits and environmental standards related to water consumption and noise. These issues have become prominent in municipal discussions around large AI data centre developments, which concentrate high-density computing equipment and can impose substantial power and cooling requirements.

CityNews reported that municipal councils would not receive a veto under the announced framework. At the same time, BNN Bloomberg reported that Oakville enacted a one-year data centre moratorium and that Mississauga was scheduled to consider its own pause. Reporting cited residents' concerns about noise, water, heat, air pollution, grid strain, and utility costs.

Ontario's proposal places grid interconnection, rate design, and local-benefit criteria alongside conventional project economics. For operators building GPU-intensive training and inference capacity, the relevant constraint is not simply whether a site can obtain power, but whether it can satisfy the jurisdiction's connection and cost-allocation rules.

High-density AI data centres make electricity use and local requirements central to infrastructure planning. Ontario's consultation is therefore relevant beyond Canada as an example of policymakers tying AI infrastructure expansion to ratepayer protection and community-level requirements.

The final scope, eligibility thresholds, technical approval criteria, and implementation timetable remain open questions until Ontario publishes its completed framework and any accompanying regulation.