Tyler Hamilton and Irene Lam co-led the Future of Data Centres in the GTHA and Ontario project, a partnership between MaRS Discovery District and Mantle Climate, funded by The Atmospheric Fund.
Data centres are no longer niche tech infrastructure. They may become as fundamental to our economy as transportation networks and energy grids. Canada ranks fifth globally in data centre density, and the GTHA is at the centre of this growth. With AI driving demand for thousands of megawatts of new electricity load expected over the coming 10 years, Ontario faces a defining question: Can we build this infrastructure in a way that strengthens our energy system and the communities it serves, rather than working against them? Only if we design for low-carbon outcomes and build community trust from the start.
A growing tension, and a real opportunity
Beyond their economic benefits of enabling investment, employment, and tax revenue, when planned well, data centres can also catalyze low-carbon energy innovation and investment in clean generation, storage, demand response, and district energy systems that benefit the broader grid.
At the same time, this growth is introducing real questions. Communities are rightly asking what data centres will mean for the climate and surrounding environment, and who bears the cost of the additional infrastructure needed to power these energy-intensive facilities. In some jurisdictions, those questions have gone unanswered for too long, leading to backlash that has delayed or derailed projects. The scrutiny is mounting from communities, policymakers, and public figures like Erin Brockovich. But it’s also an opportunity to get the model right from the start – shaping growth that works for both the environment and communities.
What we learned in Ontario
Over the past year, MaRS Discovery District and Mantle Climate brought together 35 interested parties from across the energy and digital infrastructure sectors to study the future of data centres in Ontario. The resulting report, Sharing the Load, found that Ontario could see 1.5 gigawatts of new data centre load by 2035, with high-growth scenarios approaching 3 gigawatts.
Under the baseline 1.5-gigawatt scenario, Ontario’s electricity system can largely accommodate the new load. Even so, emissions from data centres would more than triple by 2035 to 7.3 percent of Ontario’s total, with the GTHA bearing the greatest concentration at 10% of regional emissions.
Under a high-growth 3-gigawatt scenario, the additional 1.5 gigawatts would likely be met largely by on-site natural gas generation under a “do nothing” pathway, driving data centre emissions to an estimated 56 percent of Ontario’s total. With higher adoption of mitigating solutions, including demand response, waste heat recovery and reuse, and clean power purchase agreements (PPAs), that figure drops to 40 percent in our modelling. With more ambitious low-carbon design approaches, it could go significantly lower. Real-world impacts will depend on the policy and design choices made over the next decade.
Designing for shared value
A central finding of the research is the opportunity for co-located, purpose-built infrastructure – “sustainable compute hubs” – where data centres, energy systems, and surrounding development are planned together to optimize climate and community outcomes.
These hubs unlock emissions reductions that standalone facilities can’t. Roughly half of a data centre’s electricity consumption goes toward running servers that generate significant heat, with much of the remainder going to cooling. When the waste heat from a data centre anchors a district energy system, surrounding neighbourhoods can rely on significantly less natural gas for heating needs, and overall data centre electricity use can be cut by up to 30 percent. Canadian companies, such as Extract Energy and Enersion, are advancing complementary technologies that convert waste heat directly into clean electricity or cooling.
Beyond hubs, developers can deliver grid and community benefits in other ways. By pairing energy storage with clean, on-site generation, facilities can act as flexible grid assets, shifting power usage during peak demand, absorbing excess renewable energy, and at times even feeding clean power back into the local grid. PPAs with clean, off-site generation can further reduce grid emissions by financing new renewable capacity.
Engagement as a climate enabler
Designed well, this approach reshapes the conversation with communities. Instead of asking them to absorb the costs of digital infrastructure growth, sustainable design gives developers something meaningful to bring to the table – shared energy, reduced emissions, and tangible local benefits.
But low-carbon design is only half the equation. Our research and ongoing industry dialogue are making one thing increasingly clear: community concerns are shaping the trajectory of development. Translating sustainable design into community trust requires collaborative planning from the start, including Indigenous groups, municipalities, utilities, and residents. That’s how the industry earns the trust to grow sustainably at the scale Ontario needs.
Canada’s opportunity
Ontario is still early enough in its data centre growth curve to get this right. We have the chance to embed these sustainable practices into how projects are planned, approved, and delivered. The decisions made in the next three to five years will determine whether AI infrastructure growth strengthens or strains Ontario’s energy systems and municipal climate action efforts.
The takeaway is straightforward: sustainable design is how data centres earn a place in Ontario’s energy system. Meaningful engagement is how the industry earns the trust to deliver at scale.
About the authors
Tyler is Senior Director, Climate at MaRS Discovery District, where he oversees MaRS’s climate and cleantech programming.
Irene is the Director of Client Services at Mantle Climate, where she manages the firm’s data centre and digital infrastructure sustainability practice.
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