TORONTO — Additional Ontario municipalities moved to consider restrictions on new data centre construction on Friday, days after the Town of Oakville enacted a one-year moratorium citing concerns over electricity and water demand from AI infrastructure.

Oakville's council approved the pause earlier this week, becoming one of the first Ontario municipalities to formally halt new data centre approvals. The freeze would allow staff to study the impact of large-scale computing facilities on local power supply, land use and municipal services.

The Independent Electricity System Operator, which manages Ontario's grid, has warned that data centre and electrification demand could strain provincial capacity in the coming decade. Municipal planners in the Greater Toronto and Hamilton Area have pointed to the surge in AI-driven server farm proposals as a factor prompting closer scrutiny of zoning and connection requests.

Industry groups, including the Canadian arm of data centre operators, argue that blanket moratoriums risk pushing investment to other provinces such as Quebec, where hydroelectric power is cheaper and more abundant. Municipal officials counter that they need clearer provincial guidance on power allocation and cost recovery before approving energy-intensive projects.

The Ontario Ministry of Energy is developing a framework to prioritise grid connections, though no final policy has been published. Planners expect the Oakville decision to influence deliberations in several neighbouring councils over the coming weeks.