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Data centres in Canada

Data centres are warehouses of computers. They store records, run cloud software, and train AI models. They have become a civic issue because they ask host communities for large amounts of electricity, sometimes water, industrial land, and quiet overnight operation — while the jobs and tax benefits are often smaller than the buildings suggest.

Updated · 2026-09-16

Why this shows up in council

Most people never visit a data centre. The fight is usually about what the building takes from the local grid, water system, and neighbourhood — and what, if anything, it gives back.

  • Electricity

    A large facility can draw as much power as a small city. Provinces decide who gets to connect to the grid and who pays for new supply. If the operator does not cover the costs it creates, households and existing businesses can end up subsidizing someone else’s compute bill.

  • Water and heat

    Some centres use water to keep servers cool. Others use closed-loop or air cooling. Waste heat, noise from chillers and generators, and effects on local water supplies are now standard questions at public meetings.

  • Land and zoning

    These buildings are large, windowless, and often proposed on industrial land. Most Ontario official plans were not written with hyperscale computing in mind, so councils are now deciding whether to pause, permit, or rewrite the rules.

  • Local benefits

    Construction work is real. Ongoing staffing is often small. Communities are asking for jobs, training, tax contributions, heat reuse, and access to compute — and for those promises to be written down before a shovel hits the ground.

Who actually decides

No single government owns this file. Connection to the grid, the electricity rate, and the building permit can all be decided by different orders of government.

  1. 01

    Municipal

    Cities and towns control zoning, site plan approval, and building permits. They can pass a temporary freeze under an interim control by-law while staff study the issue. That is the tool Oakville and Mississauga used in 2026.

  2. 02

    Provincial

    Provinces run the electricity system. Ontario already has rules for connecting large loads, and in August 2026 it published a draft Data Centre Playbook. Quebec and British Columbia have also limited new data-centre connections to protect grid capacity.

  3. 03

    Federal

    Ottawa does not issue the local permit. On 3 September 2026 it published five Responsible Data Centre Development Principles. They are a national baseline, not a new federal approval process, and they are not legally binding on their own.

What is happening now

The live fight in 2026 is mostly municipal: neighbouring cities are reaching opposite conclusions about the same industry.

  1. 16 September 2026

    Mississauga

    One-year pause

    City council voted unanimously for a one-year moratorium on new data centres, after a 40-megawatt Prologis proposal drew public opposition over power, water, and noise.

  2. 15 September 2026

    Vaughan

    No freeze

    Council rejected a similar moratorium, 9–1. A large Microsoft expansion is already underway in the city.

  3. 3 September 2026

    Federal

    Principles

    AI minister Evan Solomon and the Federation of Canadian Municipalities launched five national principles: local benefits, no cost-shifting on electricity, less water use, transparency, and strategic value to Canada.

  4. August 2026

    Oakville

    One-year pause

    Oakville passed Ontario’s first municipal data-centre freeze, using an interim control by-law while staff complete a planning study.

  5. 13 August 2026

    Ontario

    Draft playbook

    Premier Doug Ford released a draft Data Centre Playbook. It proposes a higher electricity rate for centres over one megawatt, prefers water-free or closed-loop cooling, and says the province can refuse projects that do not meet the test.

  6. February 2026

    Greater Napanee

    Permitted use

    Council amended its zoning to list data centres as a permitted use on industrial land — the opposite of a freeze.

The five federal principles

These are expectations, not a statute. Ottawa says provinces, territories, municipalities, and Indigenous governments still make the binding decisions. Companies that signed on can still be asked to show their work.

  1. 01Data centres must create lasting local benefits.
  2. 02Data centres must not shift electricity costs to Canadians.
  3. 03Data centres must minimize water use and environmental impacts.
  4. 04Data centres must be transparent about local impacts.
  5. 05Data centres must bring strategic value to Canada.

Related bill topics

When this issue shows up in legislation, it is usually classified under these broader subjects.

Sources

This briefing is a civic explainer, not legal advice. Read the official documents and local council records before acting.