New rules for data centres: pay full power costs and make local investments

What’s happening and who it affects

• The province launched a Data Centre Playbook to guide which new data centres can connect to the electricity grid.
• This affects companies planning data centres larger than 1 megawatt (MW) and the communities that host them.

Key rules and standards

• Data centres must pay the full cost of their electricity impact; the government will offer only non-financial support.
• The government proposes a separate, higher electricity rate class for new data centres above 1 MW (higher than the industrial large-user rate).
• Projects that build their own power will be prioritized.
• New data centres must meet strict environmental standards (prioritizing closed-loop cooling that uses virtually no water) and noise limits.
• The Protect Ontario by Securing Affordable Energy for Generations Act gives the Minister of Energy and Mines final authority over large-load grid connections, including data centres.

What the Playbook will require from projects

• Demonstrate significant economic investment, job creation, and tax revenue for the province and municipalities.
• Support domestic supply chains and data security so Canadians’ data remains in Canada.
• Deliver financial and non-financial investments to host communities (infrastructure, training, local jobs).

Numbers the release highlights

• The government links the Playbook to its AI strategy goals: $122 billion in economic growth by 2035 and more than 17,000 new jobs every year (as stated in the release).
• Public consultation: 30-day comment period starting August 13, 2026, on the Environmental Registry of Ontario and the Ontario Regulatory Registry.

Why it matters

• The framework aims to steer data centre growth so it adds local economic and security benefits while preventing higher electricity bills for other ratepayers.