Ontario's New Plan for Power: Prioritizing Data Centres
The provincial government is changing the rules for how energy-intensive data centres connect to the electricity grid. Here's a look at the official announcement.
Hello everyone, and welcome back to your briefing on government proceedings.
On July 2, 2025, the Ontario government announced a new plan to manage how data centres connect to the province's electricity grid. The goal is to move away from automatic approvals and instead prioritize projects that create jobs and align with Ontario's economic interests.
Here’s a simple breakdown of the announcement, using only the information from the official release.
What's Changing?
The government is introducing new measures to manage the growing demand for electricity from data centres, which are needed for things like AI and cloud computing. Previously, electricity utilities had to connect all data centres automatically, no matter how much energy they used or their economic impact.
Under the new plan, part of the proposed
Protect Ontario by Securing Affordable Energy for Generations Act, 2025, certain data centres will need to get government approval before they can connect to the grid.
The stated goals of this new approach are to:
Prioritize approvals for data centres that create high-quality jobs and strengthen the digital economy.
Ensure Canadian data is stored within Canada to protect it from what the government calls "weaker foreign privacy regimes."
Manage electricity connection requests to focus on projects that provide clear economic and strategic benefits to the province.
The Demand for Power ⚡
The province notes that the demand for electricity is growing significantly.
Data centres that are currently asking to connect to the grid represent a demand of over 6,500 megawatts.
This is about 30% of Ontario's entire peak demand in 2024, or the same amount of power produced by a nuclear plant the size of the Bruce Power Nuclear Generating Station.
By 2035, the data centre industry is expected to account for 13% of all new electricity demand in Ontario.
What They're Saying
Several government officials and community leaders commented on the new energy plan.
Stephen Lecce, the Minister of Energy and Mines, stated:
"These measures will ensure we're not just plugging in servers - we're powering Canadian opportunity, protecting Canadian data and jobs, and making sure energy is used where it delivers real value to our country."
Sam Oosterhoff, Associate Minister of Energy-Intensive Industries, added:
"As we experience increasing energy demands not only from our energy-intensive industries, but also from the pressures of attracting new investment to the province we have to ensure we are taking action to prioritize projects that create good jobs and get these projects connected to the energy they need."
Leaders from the tech and economic development sectors also weighed in. Sheldon McCormick, CEO of Communitech, said:
"Ontario's focus on protecting data sovereignty is a smart and necessary move. As artificial intelligence (Al) continues to evolve, it's more important than ever to ask who controls our data and how we keep it safe. By focusing on infrastructure that supports Al adoption and protects our data, we're laying the groundwork for our innovation community to continue to grow and lead."
Vivek Goel, President and Vice-Chancellor of the University of Waterloo, commented:
"At the University of Waterloo, we understand that a strong, sovereign digital infrastructure is essential for protecting Canadian data, supporting research, and enabling the responsible growth of Al and emerging technologies. This policy ensures that our province remains a trusted and competitive home for tech talent, research, and investment."
Key Facts at a Glance 📝
The government's release also included several statistics about Canada's position in the global digital economy.
The worldwide data centre construction market is projected to reach $49 billion by 2030.
Canada is one of the top ten largest data centre markets, with revenues of $8 billion.
Spending on servers in Canada is expected to grow by 66 percent by 2029, reaching a value of about $4 billion.
According to the National Cyber Security Index, Canada ranks second in the world for its preparedness in preventing and managing cybersecurity threats.
This new policy connects provincial energy supply directly to economic development goals. Which of these topics matters most to you and your community? Let us know below. 🇨🇦