Local Opposition To New AI Data Centres Grows In Canada And The United States

The rapid expansion of artificial intelligence infrastructure across North America has generated a wave of local opposition. According to Data Center Watch, more than $162 billion in AI data centre projects have been delayed or blocked since 2023, including $98 billion in the second quarter of 2025 alone.¹

At least 142 activist groups across 28 U.S. states now target large-scale (50+ MW) AI data centre projects, and the opposition is notably bipartisan.

Within the U.S., local opposition started in Loudoun County in northern Virginia. The county has a population of less than 500,000 while hosting approximately 200 AI data centres. In hindsight, Loudoun County is considered the “canary in the coal mine” in terms of AI data centre opposition in the U.S.

With respect to local opposition in Canada, recent events in the City of Hamilton suggest that the City ought to be viewed as Canada’s “canary in the coal mine” in terms of local opposition and reaction to it; however, if the warning is taken seriously by municipal councils and developers, the experience south of the border might be avoided in Canada.

Issues leading to local opposition

In the context of land use planning and development, local opposition to AI data centre development generally focuses on the following three concerns: water consumption, rising costs of electricity in areas proximate to AI data centres, and noise emissions.

For example, large hyperscale facilities may require up to 5 million gallons per day—comparable to the daily consumption of a small municipality.² With respect to electricity usage, a Bloomberg analysis found that electricity costs rose nearly 267% in areas proximate to data centre clusters.³ With respect to noise emissions, elevated noise levels from diesel backup generators and cooling fans are generally cited as the causes for concern.

While the issues set out above raise legitimate concerns that ought to be addressed, it is worth considering whether local opposition to AI data centres is actually being driven by deeply held existential fears about AI’s potential unknowable impact on the future of humanity itself rather than the rising cost of electricity. After all, there have always been certain land uses that most people would agree are objectionable yet necessary and none of those lead to the degree of collective furor that AI data centres seem to ignite.

How local opposition builds and spreads

In the U.S. the National Conference of State Legislatures reports that lawmakers in at least 15 states have considered legislation that would impose moratoriums or outright prohibitions on new data centre development.⁴

Within Canada, recent events at the City of Hamilton Committee of Adjustment and City Council suggest that local opposition to AI data centre development is mobilizing, following a trajectory similar to what is occurring south of the border.

At the Committee of Adjustment, hundreds of people gathered on June 4 to oppose an application to sever a parcel into two parcels, one of which might be used to host an AI data centre. While the application technically met the planning criteria required for approval, the application was denied at the instance of protesters generally adverse to the concept of data centres.

The developer has since appealed the refusal to the Ontario Land Tribunal where the application will be considered by the provincial Tribunal. The appeal process can be time-consuming and costly, and the outcome is never guaranteed for any party.

Shortly thereafter, on June 24, the City of Hamilton Planning Committee (which is composed of most City Councillors) voted to recommend to Council the passage of Canada’s first interim control by-law related to data centre projects.

Council will make a final decision about this on July 15 and if passed, the by-law will likely freeze all AI data centre development in the City for an initial 12-month period to allow time for City staff to study how AI data centre development ought to be regulated going forward. The prohibition can be extended for an additional 12-month period at Council’s discretion. Although the by-law can be appealed to the Ontario Land Tribunal, as a practical matter the 12-month moratorium could expire before any appeal on the merits is heard and a decision is rendered by the Tribunal.

A way forward…

Before local opposition builds, municipal councils can and should adopt a robust and transparent consultation process that “kicks in” automatically as part of the planning process whenever a developer engages in a municipal pre-consultation process. The key to making public consultation effective is to start as early in the planning process as possible.

An effective consultation process and communication plan framed as a joint effort not only takes some of the pressure off local elected officials and staff, but can help developers avoid costly and time-consuming appeal processes that can add years and, perhaps more concerning uncertainty, to the development process.

In the current competitive climate, having a focussed discussion with local leaders is a necessary component of any data centre development project.

If you have any questions about a data centre project in Canada, please contact the authors and visit our data centre hub.

Footnotes

1. Data Center Watch, "$162 Billion in Data Center Projects Delayed or Blocked" (Q2 2025); Energy Platform News (May 2024-March 2025).

2. World Resources Institute, "Data Centers and Water Stress" (2024-2025); Bloomberg analysis of electricity costs near data centres.

3. Hydro-Quebec, citing Bloomberg, analysis of electricity rate increases near data centre clusters (2026).

4. NCSL, "Which States Are Banning Data Centers?" (2025-2026); state legislative tracking databases.

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