A proposed framework to guide government decisions on which large data centres (≥1 MW) may connect to Ontario’s electricity grid under new authorities in the Protect Ontario by Securing Affordable Energy for Generations Act. In exchange for scarce grid capacity, projects must deliver economic and community benefits, pay full electricity and grid-expansion costs, and advance priorities like digital sovereignty. Core principles are:
- Data centres must invest substantially in Ontario and host communities.
- Data centres pay the full cost of electricity (no eligibility for the Industrial Conservation Initiative; a separate, higher rate class is proposed).
- Ontario will offer only non-financial support, not cash incentives.
How it works:
- System Impact Assessment: Tests connection feasibility, grid impacts, and full cost recovery, including proponent plans for on-site generation (“bring your own power”) and grid reinforcements.
- Strategic Priority Assessment: Scores proposals against three pillars where grid capacity is scarce or provincial priorities apply:
- Pillar 1 | Advance Economic Development: High-quality jobs, investment, tax revenue, domestic supply chains, compute access for Ontario SMEs.
- Pillar 2 | Protect Data Security and Digital Sovereignty: Safeguard critical data/infrastructure, align with federal sovereignty objectives, preferably Canadian-owned/operated.
- Pillar 3 | Invest in Communities and Earn Public Confidence: Meaningful local benefits, labour participation or apprenticeships, public engagement, minimised impacts on municipal technical/fiscal capacity and environment (e.g., closed-loop cooling).
What it promises:
- No cost pass-through to existing ratepayers; data centres may pay more than other large industrial users.
- Community amenities (parks, roads, community centres), apprenticeships, local supplier participation, and modern cooling/heat-recovery tech
What it doesn’t deliver (key gaps):
- No published thresholds, weights, or scoring rules for the three pillars or for ranking competing projects.
- No enforceable commitments: unclear if benefits will be contractual, audited, publicly reported, or subject to clawbacks.
- No municipal consent/veto: Premier Ford has stated councils won’t get veto power; “public confidence” is not the same as consent.
- No mandatory, measurable environmental caps: environmental impacts are listed as considerations but lack quantitative limits or cumulative-impact assessment.
- Sovereignty is vague: “preferably Canadian-owned” is not defined; no mandated controls on encryption keys, admin access, data exhaust, or foreign legal exposure
Why it matters:
The Playbook governs visible outputs (jobs, donations, cooling tech) but leaves upstream conditions – absolute load, water draw, foreign control planes, and cumulative grid/watershed stress – unverified and unbounded. That creates structural vulnerabilities: approvals based on promises, not proven, audited outcomes.
What’s needed before new approvals:
- Measurable environmental caps with independent monitoring (electricity, water, noise, emissions including embodied and backup generation).
- Cumulative-impact assessment and regional caps on load, water withdrawal, and infrastructure strain.
- Binding digital sovereignty controls (Canadian/approved control over keys, admin access, backups, telemetry; disclosure of foreign legal exposure).
- Enforceable community benefits with audit rights, public dashboards, and clawbacks/penalties.
- Municipal consent and developer-funded upgrades for roads, water, sewer, emergency services, and land-use impacts.
- Grid and climate realism: system-peak impacts, emissions intensity of marginal supply, and climate resilience
Summary
A time-limited moratorium on new large data centre approvals is justified until the final framework includes measurable environmental and public-interest requirements. Ontario should welcome clean, accountable, public-interest computing – not unlimited, unmeasured electricity demand.
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