Ontario Municipalities Navigate Moratoriums on AI Data Centres Amid Growing Energy Concerns

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Several Ontario municipalities are implementing moratoriums on data centres as they assess the implications of AI-driven facilities on energy consumption and community impact.

OTTAWA — The rapid expansion of artificial intelligence has thrust Ontario municipalities into a significant discussion regarding the regulation of burgeoning, energy-intensive data centres. In recent months, various municipalities have enacted temporary moratoriums on data centre developments while they explore potential regulatory frameworks. Some municipalities have even modified their bylaws to specifically allow data centres on industrial lands.
In Hamilton, the city became the first in Canada to propose a one-year moratorium on data centres through an interim control bylaw. This proposal initially gained support in committee but was ultimately rejected by the council in July following a closed meeting with legal advisors. City officials have continued to work on a data centre planning study, which aims to establish guidelines addressing issues such as energy consumption and noise pollution.
Oakville recently stood out by successfully implementing a moratorium, making it the first town in Ontario to do so. While Oakville officials indicated that there were no formal applications for data centres at that time, developer Hive Digital Technologies had previously announced plans for a substantial 320-megawatt AI facility in the Greater Toronto Area, with a targeted operational date in the latter half of 2027.
Sault Ste. Marie’s council took action last month, directing staff to draft a moratorium targeting data centres with energy requirements exceeding 50 megawatts. A vote on this proposed moratorium is scheduled for September 21.
In February, Greater Napanee passed a bylaw permitting data centres as an acceptable use within its industrial zones. Meanwhile, Toronto's council initiated a review of its planning policies regarding data centres in July and urged the provincial government to establish a comprehensive framework for Ontario. Councillors were also instructed to stay informed about any significant data centre proposals.
Ottawa’s city council similarly directed staff last month to conduct a study aimed at developing an evaluation framework for data centres, contemplating potential policy amendments. Until this framework is presented to the council, officials were tasked with notifying councillors about any large-scale data centre proposals, enabling the city to consider temporary moratoriums on a case-by-case basis to mitigate community impacts.
Milton also engaged in discussions about data centres, directing staff to explore the topic, though a proposed interim control bylaw was ultimately voted down. In Burlington, the council rejected a proposal for a temporary moratorium in July but instructed staff to examine existing regulations concerning data centres.
Lastly, Waterloo Region’s council directed staff in August to provide a report early next year regarding the implications of data centre development in the region.

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