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A growing conflict between the Ontario provincial government and several of its largest municipalities is shaping the future of artificial intelligence data centres across the province. Premier Doug Ford wants to push development forward aggressively, while a number of cities have moved to slow or halt construction entirely — leaving residents caught between competing visions.
Cities Push Back Against Data Centre Expansion
Ford recently declared that Ontario must move “full steam ahead” on building data centres. He said the province would set strict rules around their location and construction. However, several municipalities have already taken steps in the opposite direction.
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In August, Oakville became the first Ontario municipality to approve a one-year moratorium on data centre development. Mississauga and Sault Ste. Marie followed with similar measures one month later. Meanwhile, Hamilton and Burlington city councils both voted down motions to pause construction in their communities.
The Association of Municipalities of Ontario (AMO) responded by submitting a ten-page report to the Ministry of Energy and Mines. The report outlined the organization’s top priorities for data centre development. Because data centres create relatively few jobs after construction ends, AMO wants the province to favour projects that include community benefits — such as funding a local community centre alongside the data centre itself.
AMO also asked the province to confirm that hosting a data centre will not drain excessive power from already strained electrical systems. The organization wants assurance that municipalities can still deliver their other priorities without disruption.
Province Responds With “Do No Harm” Policy
Economic Development Minister Vic Fedeli addressed some of AMO’s concerns at a recent news conference. He said data centre companies must either pay a premium rate for electricity or generate their own power. Fedeli added that the province has adopted a “do no harm to the municipality” approach for data centre developers.
Under this policy, the government will offer only non-financial support to attract data centre investment. Developers must also cover the full cost of their electricity use. The province says this ensures that ordinary ratepayers do not absorb those costs.
However, questions remain about how far the province would go if a municipality refused to cooperate. Ford has a track record of overriding city council decisions. When asked directly, he said he would “sit down with the mayor and council and consult with the community,” but added that he would prefer to work with a “willing host.”
Residents Express Concern at the Local Level
At the Mississauga city council meeting where the data centre moratorium was debated, local residents urged the city to pause approvals. They wanted more time to understand the consequences for their neighbourhoods.
Among those following the issue closely is Katie Steinfeld, a real estate agent who monitors Ontario AI data centre proposals. Frustrated by the lack of accessible information, she launched the Ontario Data Centre Tracker — a website that logs and provides details on data centre projects across the province.
“I think pausing is a good thing,” Steinfeld said. “It doesn’t mean you’re saying ‘no’ to data centres. It’s just saying let’s take a step back because these developments are coming at a hyperscale, and we’re not caught up in terms of regulations and in terms of knowledge.”
Steinfeld built the tracker partly because of concerns raised by her real estate clients. “When people are looking to buy a home, they want to know where they’re going to be moving to and what might be planned for that neighbourhood,” she said. She also noted that some residents have contacted her after discovering a data centre was planned nearby — and said they now want to move.
Ford, who released an AI data centre playbook in August, has suggested that residents are “misinformed” about the potential drawbacks of these facilities. However, at least one expert argues the government itself may hold some misconceptions — particularly around data sovereignty.
Expert Challenges Data Sovereignty Claims
Evan Light, an associate professor at the University of Toronto’s Faculty of Information, says the physical location of a data centre does not determine who can access the data inside it. Instead, he explains, what matters is the nationality of the company that owns the facility.
“The U.S. Cloud Act allows the U.S. government to peek into whatever data is held by American companies wherever they may be operating,” Light said. “Just because we propose building things here doesn’t mean that we completely control them.”
This is a relevant concern in Ontario. For example, Microsoft — an American company — owns the new hyperscale data centre in Vaughan. The Ford government says it will prioritize Canadian projects, but American firms are already building in the province.
Light also challenged the idea that Canadian data stays within Canada’s borders. “Just because you have data centres in Canada doesn’t mean that your data only stays here,” he said. “It doesn’t go from your home to a data centre. If anything, it would probably transit through the U.S. and come back.”
The province recently wrapped up a 30-day public consultation on its data centre playbook. As a result, observers expect the government may table related legislation during the fall session at Queen’s Park. The exact timeline, however, remains unclear.
