New Requirements for Data Centres Seeking to Connect to the Electricity Grid in Ontario

The Ontario government is taking action to prioritize electricity for data centres that support the province’s economic interests, including those that create high-quality jobs, assist in domestic data hosting and strengthen Ontario’s position in the digital economy. This approach is grounded in Ontario’s new integrated energy plan, the province’s strategy to secure the affordable, secure, reliable and clean power needed to support economic growth in high-demand sectors like digital technology.

The data centre sector is forecast to represent about 13 per cent of new electricity demand in the province by 2035. The growth is an opportunity to drive investment, innovation and job creation, particularly in northern and rural communities where new investments could anchor new high-tech ecosystems.

Supporting domestic data housing will protect data sovereignty by ensuring Canadian data stays in Canada and is protected from misuse and weaker foreign privacy regimes.

To ensure responsible growth that aligns with public priorities, in June 2025 the government introduced legislative amendments that, if passed, will provide authority to set out in regulation that data centres covered by the regulation must meet the certain requirements before connecting or re-connecting to the electricity grid.

If the legislation passes, the proposed regulation will require covered data centre projects to receive approval from the Minister of Energy and Mines to connect to the provincial electricity grid. These changes will welcome new investment and job creation by allowing Ontario to manage electricity connection requests and prioritize data centres that deliver local, strategic and economic benefits that enhance Ontario’s competitiveness, energy security and long-term prosperity.

The government is seeking input on the types of data centres that would be subject to the proposed requirement, including the electrical connection size (e.g., greater than 50 megawatts) and geographic area where there could be surplus or constrained connections for electricity, of the prospective developments.

Apart from input on proposed connection size and geographic area, MEM is seeking stakeholder input on the following questions:

1. Do you support the proposal to prioritize electricity connections for data centres that demonstrate economic, strategic, security, and local community benefits?

    

2. What criteria should be used to define a data centre that supports Ontario’s economic and data sovereignty interests?

3. How can the approval process be designed to be efficient, transparent, and predictable, while still allowing Ontario to prioritize beneficial projects?

    

4. What timelines would be reasonable for evaluating and approving data centre connection requests?

    

5. How can the government balance the electricity needs of data centres with those of other energy-intensive industries (e.g., manufacturing, mining, etc.)?

    

6. What types of local benefits (e.g., employment, tax revenues, infrastructure investments, etc.) should be considered in prioritizing data centre approvals?

    

7. What is the cost to prospective data centres for requesting to connect to the electricity grid (e.g., cost to complete system and connection impact assessments)?

    

8. What policy or pricing mechanisms could be implemented to ensure that large electricity users, particularly those that necessitate system expansion, contribute a greater share of infrastructure costs while ensuring the materialization of demand (e.g., letters of credit, etc.)?

    

9. Do you support the adoption of a distinct electricity rate class, specifically for large data centres?

    

10. What types of policy tools or incentives could be introduced to encourage the development of data centre projects in northern Ontario?

Environmental Impact  

The proposal is not expected to a have a material impact on the environment.