Canadian Cities Implement Restrictions on Large Data Centres

Municipal governments in Canada are implementing restrictive zoning and regulatory frameworks to manage the growth of large-scale data centres. In North Cowichan, the Municipality of North Cowichan council unanimously voted on September 2 to prohibit data centres as a permitted land use. This change requires any future developers to apply for a zoning amendment, which triggers a mandatory public hearing and council approval.

Councillor Chris Istace introduced the measure to protect industrial land for employment-intensive sectors, citing the high water and electricity consumption of AI and cloud facilities. While Councillor Becky Hogg expressed concern that the word prohibit might discourage investment, Mayor Rob Douglas clarified that applications can still be submitted but must undergo council scrutiny.

Similarly, the Sault Ste. Marie City Council approved a draft framework and an interim bylaw that prevents the establishment of new data centres for up to one year. Under this conservative approach, any facility with a capacity of 5 MW or more is classified as a restricted land use, requiring a rezoning application. Applicants must prove that municipal water, sewer, and electrical infrastructure can support the project. This move follows an August announcement that Algoma Steel is partnering with Red Jar Energy Partners to evaluate a potential 400 MW data centre in the city. A final report on the Sault Ste. Marie framework is expected in early 2027.