Here’s how some Ontario municipalities are grappling with new AI data centres

As the artificial intelligence industry booms, Ontario municipalities are facing a new challenge - regulating a wave of large, energy-intensive data centres. Several towns have recently voted on temporary moratoriums to study potential regulations.

The city was the first in Canada to vote on a one-year data centre freeze, known as an interim control bylaw. Although the proposed moratorium passed committee, it was ultimately voted down by council in July after a closed-door legal session. City staff are currently conducting a data centre planning study to examine possible safeguards, such as energy demands and noise pollution.

Oakville became the first municipality in Ontario to approve a moratorium in September, pending completion of a planning study. However, developer Hive Digital Technologies recently announced plans for a 320-megawatt AI facility, targeted for completion in the second half of 2027. Oakville council has now directed staff to draft a moratorium on data centres with energy demands exceeding 50 megawatts, with a vote on the matter expected on September 21.

In eastern Ontario, a municipality passed a bylaw in February to permit data centres on industrial lands. Council directed staff in July to review the city's data centre policies and urged the province to develop an Ontario-wide framework. Staff were also instructed to notify city councillors about any large data centre applications.

Meanwhile, city council recently directed staff to study and develop an assessment framework for data centres, including potential policy amendments. Until the framework is presented to council, staff will be advised of any large-scale data centre applications to allow for case-by-case moratoriums to manage community impacts.

In August, the regional municipality directed staff to report back to council early in the year regarding possible data centre development implications.