The Ontario Government has launched a framework for a Data Centre Playbook to govern new data centre construction in the province, with investment both from within Canada and abroad.
The model will be used to assess which projects can connect to Ontario's electricity grid. Large-load facilities, including data centres, are now subject to a final decision by the province's Minister of Energy and Mines. Data centres will also be required to pay the full cost of their electricity use, with provincial support limited to non-financial measures.
A central feature of the framework is a tougher stance on power costs. New data centres will be expected to cover the full effect of their demand on the electricity system so households do not face higher bills.
Stephen Lecce, Minister of Energy and Mines, said the system is designed to ensure data centre owners pay their dues on electricity, down to the cent.
"While we work to attract investment and store Canadian data on Canadian soil, we have strong guidelines that safeguard families every step of the way," added Lecce.
That includes a proposed separate rate class for large new data centres and a higher tariff than the industrial rate program for large electricity users. Under the proposal, new data centres above one megawatt would face the higher rate. The province also said it would favour projects that build their own power generation facilities.
"To attract the best data centre investments that drive economic growth, ensure Canadians' data remains in Canada and deliver significant and meaningful benefits to local communities, Ontario is proposing a Data Centre Playbook," read a playbook statement highlighted in bold.
The province described the playbook as an early measure in its broader AI strategy, which it said could generate CAD $122 billion in economic growth by 2035 and create more than 17,000 jobs each year.
Environmental standards will also shape approvals. Only projects that meet the province's rules on water use and noise will advance, with priority given to modern closed-loop systems that minimise water use.
"Ontario has a choice: we can build the economy of the future and ensure Canadians' data remains in Canada, or we can get left behind and risk Canadians' data being sent to the U.S. and elsewhere," said Premier Doug Ford. "Any data centre investment will need to invest significantly in local communities and pay more for electricity so no energy costs are passed on to hardworking families."
The framework arrives as jurisdictions compete to host data centres serving cloud computing and AI workloads, while also managing pressure on power grids, water systems and land use. Ontario is trying to position itself as open to investment but selective about the terms under which it approves projects.
Ontario says it has nearly 450,000 technology workers across 26,000 businesses, including more than 1,600 AI-related companies. The province also said it has secured tens of billions of dollars in technology investment since 2018 across areas including AI, financial technology, cybersecurity and quantum technology.
The project is currently under review for a month-long comment period.