Ontario Demands Data Centres Pay Full Electricity Costs, Rejects Subsidies

Ontario announced a new framework for data centres on August 13, attempting to manage the explosive growth of facilities powering artificial intelligence while ensuring residents don't subsidize corporate energy costs. The framework establishes strict rules for approving new large data centres across the province.

Under the proposal, data centres above 1 megawatt in size must pay for 100% of their electricity costs and face a higher rate than standard industrial users. Premier Doug Ford explicitly ruled out cash incentives to attract data centre projects, stating: "If any data centre thinks they're coming into Ontario and getting a freebie: not happening."

The Framework's Three Pillars

• Economic development and job creation
• Data protection, digital sovereignty, and keeping Canadian data in Canada
• Community investment and public confidence

The move comes as requests for data centre connections have surged dramatically — the Independent Electricity System Operator reported around 7,000 megawatts of requests in July, roughly double the March figure. Several Ontario municipalities including Toronto, Hamilton, Oakville, and Mississauga have called for moratoriums or stricter guidelines, citing concerns about electricity demand. Ford noted the province expects AI strategy to generate $122 billion in economic growth by 2035 and create 17,000 new jobs annually, but only on terms that protect Ontario residents.

If you're considering moving your AI or tech startup to Ontario, understand that the era of subsidized data centre incentives is ending; the province expects companies to invest in their own renewable energy generation.

Sources

• CBC News — Ontario unveils new data centre framework amid calls for moratoriums
• The Globe and Mail — Ontario plans to charge data centres for energy costs
• BNN Bloomberg — New data centres will pay all energy costs