As Ontario grows its digital economy, data centres are increasingly seen as critical infrastructure. But their rapid expansion also brings real impacts to local communities, including rising electricity demand, increased water use, noise, air pollution from base load and backup generators (that sometimes get used for base power), and major land use considerations. The key question is how they will be planned, approved, and integrated into the communities that host them.
The province recently opened a public consultation to develop a data centre regulatory framework. As TAF looks to support municipalities meeting their climate targets, this discussion creates an important opportunity to address increasing electricity demand, carbon emissions, energy costs, and local air pollution. TAF recommends that municipal engagement and transparency are placed at the forefront of this framework.
Municipal support is critical to responsible development and planning
Municipal governments are responsible for land use planning, local infrastructure, community health, and environmental protection. They are the first to hear from residents when noise or air pollution levels rise. They are also the ones who must coordinate district energy opportunities and ensure new developments align with community plans. Municipally-owned utilities must minimize ratepayer costs and manage local grid constraints.
Without a clear requirement for municipal support resolutions or authority to integrate environmental performance requirements into planning approvals, communities risk being sidelined in decisions that directly affect them.
For instance, data centres give off a lot of waste heat – which is typically dissipated into the local airshed where it can contribute to urban heat island effect. Instead of letting that heat go unused, it can be used in a thermal energy network to warm nearby buildings, greenhouses, and industrial sites. Municipalities are best placed to coordinate these opportunities, but only if developers work with them early and design facilities that can connect to local heating systems in the future.
TAF recommends that Ontario’s framework require municipal support resolutions—similar to those used for energy projects—as a condition of approval. It may be the most impactful and important action the province can take immediately to ensure that the needs of residents are protected in data centre developments.
Municipal engagement is not a box to check, it is the mechanism through which communities shape responsible development. A municipal resolution signals that council has reviewed the proposal, assessed local impacts, and confirmed alignment with community priorities. It ensures:
- Local health and safety concerns are addressed early, not after construction begins.
- Noise, air quality, and water use impacts are properly evaluated through municipal processes.
- The costs and benefits of new electricity infrastructure are shared appropriately.
- District energy and waste heat opportunities are coordinated with local utilities and neighbouring landowners.
- Residents have meaningful opportunities to engage, ask questions, and understand how the facility will operate.
Transparency and accountability strengthen public trust
Requiring municipal support must be paired with strong transparency measures as an essential step to earning the public’s trust. TAF recommends that Ontario’s framework require that all proposed data centres be listed on a publicly searchable provincial registry that includes:
- Ownership information
- Plain language plan showing resource use and impacts, including water and heat recovery
- Municipal support resolutions or planning approvals
- Community benefits plans
- Independent baseline monitoring of noise and air quality
- Ongoing reporting on noise, air quality, electricity consumption, peak electricity demand, emissions, water consumption, backup generator operation, and heat recovery
- A documented complaints and response process
- Independent verification or audits of reported performance
These measures reflect best practices in the EU and beyond that have begun regulating data centres as major energy users.
A framework that earns public trust
Ontario has an opportunity to set a national benchmark for responsible data centre development. Doing so requires recognizing that municipalities are essential partners whose authority is central to protecting community wellbeing.
Public trust is earned through clear commitments, local accountability, meaningful engagement and transparency. With these recommendations, Ontario can build a framework that supports economic development while contributing to a resilient, low carbon future.
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