Ontario Releases Draft Data Centre Playbook For Public Comment

On August 13, 2026, the Government of Ontario released the draft framework for its Data Centre Playbook (the “Playbook”), a policy tool that will inform the government’s decisions on which data centres may connect to Ontario’s electricity grid. The draft framework for the Playbook is open for a 30-day public comment period through the Environmental Registry of Ontario and the Ontario Regulatory Registry, and the final Playbook is expected to be released as part of the government’s broader Artificial Intelligence (AI) Industrial Strategy this fall.

This update summarizes the announcement and outlines key considerations for data centre project proponents, landowners and other market participants in the coming months.

Background

The final Playbook will implement the connection-approval powers enacted under the Protect Ontario by Securing Affordable Energy for Generations Act, 2025 (“Bill 40”), which received royal assent on December 11, 2025. Bill 40 amended the Electricity Act, 1998 and the Ontario Energy Board Act, 1998 to give the government the final decision on which large-load projects, including data centres, are permitted to connect to the provincial electrical grid. This marked a shift from the previous practice, under which the Independent Electricity System Operator processed connection requests on a first-come, first-served basis.

Ontario has emerged as a leading destination for data centre investment, supported by its clean and reliable electricity system, ample available land, cool climate and skilled workforce. That same demand, however, has placed significant new pressure on the provincial electrical grid.

Notably, the Playbook will apply only to “regulated” data centres, meaning those that meet thresholds to be set out in a future regulation under the Electricity Act, 1998. Because that regulation has not yet been made, the categories of data centres requiring connection approval remain to be determined.

The Draft Playbook

The draft framework for the Playbook is anchored in three core principles: (i) data centres must invest substantially, both financially and non-financially, in Ontario and local communities; (ii) data centres must pay the full cost of electricity; and (iii) Ontario will offer only non-financial support, such as facilitation of permitting, to attract data centre investments. The Ontario government has stated it will not offer financial incentives.

For regulated data centres, the draft framework contemplates two assessments:

• System Impact Assessment: an assessment of connection feasibility, grid system impacts and full cost recovery, including a proponent’s plans for on-site generation (referred to as “bring your own power”), potential grid reinforcements and cost recovery commitments. The draft framework signals that proponents who develop their own on-site generation, and thereby reduce the load they draw from the provincial electrical grid, may be viewed more favourably in the connection-approval process.
• Strategic Priority Assessment: an assessment of how well a proposal supports three strategic pillars, particularly where projects compete for scarce electricity capacity: (i) advancing economic development, including job creation and tax revenue; (ii) protecting data security and digital sovereignty, with the draft framework indicating a preference for facilities that are Canadian-owned and operated; and (iii) investing in host communities and earning public confidence, including minimizing environmental impacts such as water use and noise.

Separately from the draft framework, the Ontario government is also considering measures to ensure data centres pay the full cost of electricity, including restricting data centres’ eligibility for the Industrial Conservation Initiative and/or establishing a data centre-specific electricity rate class.

Municipal Developments

The announcement of the draft framework for the Playbook arrives amid municipal activity on data centres across Ontario. On August 11, 2026, the Town of Oakville passed an interim control bylaw imposing a one-year pause on data centre development, and the City of Mississauga is expected to vote on a similar bylaw on September 16, 2026. Other municipal councils, including Hamilton and Burlington, have declined to impose a pause.

Next Steps

As noted above, the public comment period for the draft framework closes in mid-September 2026, and the final Playbook is expected to be released later this fall alongside the AI Industrial Strategy. The key outstanding piece is the regulation establishing which data centres require connection approval; that regulation should be monitored closely, as it will determine the practical scope of the new approval regime.

Market participants should consider the following:

• Comment Submissions: Data centre project proponents with projects planned or in the connection queue, and landowners with prospective data centre sites, may wish to consider submitting comments before the consultation window closes.
• Transaction Planning: Parties negotiating purchases, sales or financings of prospective data centre sites should anticipate that the pending approval regime and threshold regulation may affect transaction timelines and conditions this fall.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.