Ontario’s Energy Plan Unlocking Opportunities in the Digital Economy

July 3, 2025

New measures will prioritize electricity for data centres that create good-paying jobs and strengthen Ontario’s economy.

KITCHENER – 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. As part of the government’s plan to protect Ontario, the province is embracing the growth of the data centre sector as a strategic opportunity to drive investment, innovation and job creation. This approach is grounded in Ontario’s new integrated energy plan, the province’s strategy to secure the clean, reliable and affordable power needed to support economic growth in high-demand sectors like digital technology.

This Canada-first plan will prioritize and accelerate approvals for data centres that deliver measurable benefits to both local communities and to the province’s long-term competitiveness. This will include good-paying jobs for Ontarians, securing local data storage and creating a stronger, more competitive economy. This new plan will:

  • Ensure that data centres that support the province’s economic interests, including those that create high-quality-jobs, strengthen our digital economy and support domestic data housing are quickly approved for connection to the grid.
  • Ensure Canadian data stays in Canada and is protected from misuse and weaker foreign privacy regimes.
  • Explicitly require approval before certain data centres can connect to Ontario’s electricity grid, ending automatic approval for large energy-intensive loads so that the province can prioritize data centres that support its plan to protect Ontario.

The current load data centres requesting to be connected to Ontario’s grid represents approximately 30 per cent of Ontario’s peak demand in 2024, or the output of a nuclear plant the size of Bruce Power Nuclear Generating Station. With over 6,500 megawatts of data centres requesting to be connected to the grid, demand for electricity from the data centre industry, which includes artificial intelligence and cloud computing, is growing and expected to represent 13 per cent of new electricity demand in Ontario by 2035.

“Technology is the future. To ensure we are always on the leading edge as we attract good-paying jobs, we need to further protect Canadian sovereignty and data,” said Stephen Lecce, Minister of Energy and Mines. “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.”

As global demand for AI, cloud computing and data processing increases, the government introduced new legislative measures in the Protect Ontario by Securing Affordable Energy for Generations Act, 2025, that will, if passed, require data centres to obtain approval before connecting to the electricity grid. Currently, electricity utilities are required to connect all data centres indiscriminately, regardless of economic impact or energy consumption needs. These changes will welcome new investment and job creation by allowing Ontario to manage electricity connection requests and prioritizing data centres that deliver real local, strategic and economic benefits that enhances Ontario’s competitiveness, energy security and long-term prosperity.

“Ontario’s data centres are a vital part of our province’s technology landscape, as they provide the foundation of our growing digital economy and the security of our data,” said Sam Oosterhoff, Associate Minister of Energy-Intensive Industries. “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. This policy will protect and promote data centres, while also protecting our ability to attract large manufacturing facilities to our province.”

This initiative is part of Energy for Generations, the government’s long-term approach to make sure Ontario has the reliable, affordable energy it needs to be energy secure and power economic growth. The government’s integrated approach and record investments in energy infrastructure are also providing the certainty needed for Indigenous communities, municipalities, businesses and industry partners to invest confidently in Ontario’s future. With a clear path forward, the plan not only helps meet the demands of today but will help protect workers and the economy by keeping workers on the job and powering growth and opportunities for generations to come.

Quick Facts

  • According to the National Cyber Security Index, Canada scores 96.67 out of 100, ranking second in the world. The ranking is based on the nation’s preparedness in preventing and managing cybersecurity threats. The exceptional ranking signals to data centre providers that Canada is a safe and dependable location for new data center developments.
  • The worldwide data centre construction market is projected to reach $49 billion by 2030. Canada is among the top ten largest data centre markets, with $8 billion in revenue, and it has the potential to move up to the top five. Spending on servers is the fastest-growing segment of the data centre sector in Canada, and it is forecasted to grow by 66 percent by 2029, reaching approximately $4 billion in value.
  • The 2021 report ‘Foreign Interference Threats to Canada’s Democratic Process‘ specifically noted that Canada’s abundance of natural resources makes it a target for foreign interference.
  • Ontario’s electricity grid is one of the cleanest in the world with a diverse supply mix made up of nuclear, hydroelectric, natural gas, wind, solar and bioenergy.
  • By 2035, electricity demand from electrifying Ontario’s industrial sector is expected to increase by 58 per cent – the equivalent of adding 2.7 million homes to the grid.
  • Energy for Generations builds on the 2024 vision paper Ontario’s Affordable Energy Future: The Pressing Case for More Power that received 136 submissions to the public consultation from Indigenous communities, municipalities, utilities, stakeholders and the public.
  • The Protect Ontario by Securing Affordable Energy for Generations Act, 2025, if passed, will support major growth in the province’s energy system to meet rising demand, while keeping energy affordable, secure, reliable and clean for generations to come.

Quotes

“The Ontario government is taking strategic action to prepare for the future of our digital economy by ensuring that the growth of data centres aligns with our province’s priorities. By leveraging Canadian data, intellectual property, and homegrown AI capabilities, we’re protecting our interests and setting the stage for innovation that benefits Ontarians.”

– Mike Harris
Member of Provincial Parliament, Kitchener-Conestoga

“I know how vital it is that our growing communities have access to reliable, affordable energy that helps our economy flourish and drives long-term economic growth in Cambridge and Waterloo Region. This legislation ensures that data centres connecting to our grid bring real value to Ontario—protecting our clean energy supply, our privacy, and our future.”

– Brian Riddell
Member of Provincial Parliament, Cambridge

“Securing Ontario’s electricity grid is not just about keeping the lights on; it’s about powering the next era of technological advancement. With the tech power houses we have in Waterloo, this is a welcome move that will protect the energy infrastructure that fuels our digital economy. This will help ensure our region and Ontario remain a leader in innovation.”

– Dorothy McCabe
Mayor, City of Waterloo

“As Ontario rapidly scales its leadership in artificial intelligence, advanced computing, and digital infrastructure, securing our energy system is essential. This legislation helps ensure that our clean electricity powers the right kind of growth; high-value innovation, homegrown job creation, and technologies that reflect our priorities and protect our data. At the Ontario Centre of Innovation, we support the companies building Ontario’s digital future, and this approach provides the confidence and clarity they need to thrive right here at home.”

– Claudia Krywiak
President and CEO, Ontario Centre of Innovation (OCI)

“The Greater Kitchener Waterloo Chamber of Commerce is pleased to see the advancements made by the government to protect our province in the face of a rising digital economy. This is an important investment which will ensure that Canadian data does not fall in the hands of foreign adversaries, while also supporting Ontario’s economic interests and creating high-quality-jobs.”

– Ian McLean
President and CEO, Greater Kitchener Waterloo Chamber of Commerce

“The Ontario Energy Association (OEA) supports the Government of Ontario’s efforts to grow the digital economy and create high-quality jobs for Ontarians. The Government’s Energy for Generations integrated energy plan provides an excellent framework to meet Ontario’s growing energy needs, and the OEA looks forward to bringing forward solutions to support that growth to underpin job creation and economic opportunity.”

– Vince Brescia
President & CEO, Ontario Energy Association

“Ontario’s focus on protecting data sovereignty is a smart and necessary move. As artificial intelligence (AI) 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 AI adoption and protects our data, we’re laying the groundwork for our innovation community to continue to grow and lead.”

– Sheldon McCormick
CEO, Communitech

“The Economic Developers Council of Ontario (EDCO) welcomes the province’s leadership in aligning energy policy with economic development priorities. Supporting data centres that create high-value jobs, promote domestic data sovereignty, and contribute to Ontario’s growing digital economy reflects a thoughtful, strategic approach. These measures will help ensure that Ontario’s energy infrastructure continues to support community resilience, innovation, and long-term economic competitiveness.”

– Stephanie Crilly
Executive Director, Economic Developers Council of Ontario (EDCO)

“Ontario’s new measures reflect a forward-thinking approach to balancing energy security with digital innovation. 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 AI and emerging technologies. This policy ensures that our province remains a trusted and competitive home for tech talent, research, and investment.”

– Vivek Goel
President and Vice-Chancellor, University of Waterloo

“As we grow, we need to prioritize strategic action and investments that will serve our communities for years to come. Protecting Ontario’s energy grid for future need is critical in ensuring we can sustainably welcome new economic development opportunities, support our growing technical needs, and ensure we all have the energy required to power our day to day lives.”

– Karen Redman
Regional Chair, Waterloo Region

“Prioritizing data centers that support our economic interest when they connect to the electrical grid is a critical step in strengthening Ontario’s digital economy and supporting domestic data housing. This aligns perfectly with MIX’s mission to establish Ontario as a global leader in health innovation, ensuring our companies have the infrastructure, resources and security they need to succeed and provide Ontarians with access to the world’s most advanced health solutions.”

– Elliot Fung
Executive Director, Medical Innovation Xchange

“Conservative estimates are that by 2035 North America will need 3-5x the amount of electricity it consumes today to keep up with demand for AI data centers. Anything that the province can do to promote an increase in electricity production and development of domestic data centres is positive.”

– Amber French
CEO, Catalyst Ventures

Additional Resources

Energy for Generations: Ontario’s Integrated Plan to Power the Strongest Economy in the G7

Integrated Energy Resource Plan Consultation