Ford government proposes new powers to control who gets electricity access

National Observer

2 days ago

The Ford government is pushing ahead with legislation that would give it sweeping new powers to decide which companies — particularly data centres — can connect to Ontario's electricity grid. Critics say the move could open the door to political interference, weaken public oversight and erode investor confidence.
The proposed Protect Ontario by Securing Affordable Energy for Generations Act would override existing laws that require utilities to connect all data centres indiscriminately. Instead, the government would prioritize grid access for companies it deems as supporting 'economic growth,' said Energy Minister Stephen Lecce during a press conference Wednesday in Kitchener, Ont.
'Technology is the future,' Lecce said. '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.'
The province says the changes are necessary to manage soaring demand from hyperscale data centres — massive digital infrastructure hubs that power artificial intelligence, cloud computing and data storage. Lecce said more than 6,500 megawatts of data centre connection requests are already in the queue — about 30 per cent of Ontario's current peak electricity load.
Ontario is already home to more than 100 data centres. Canada ranks in the global top 10 data centre markets, and spending on servers here is expected to grow 66 per cent by 2029. Worldwide, the industry is booming, with construction expected to reach $49 billion by 2030.
Critics argue the legislation opens the door to backroom deals and political influence over energy access.
'It creates a dynamic where companies go directly to elected officials or their staff to negotiate deals, rather than going through an independent and transparent process,' said Keith Brooks, programs director at Environmental Defence.
Ontario's new proposed legislation would override existing laws that require utilities to connect all data centres indiscriminately and give the government sweeping new powers to decide which companies — particularly data centres — can plug in.
Brooks said the legislation reflects a broader trend — from Bill 5 to the Greenbelt to energy sector reforms — of consolidating control in the hands of the minister while weakening independent oversight.
'There's always a risk when corporate interests are negotiating agreements with governments in back rooms,' he said. 'They [the Ford government] often point to external pressures — energy demand, housing need, trade tariffs — as reasons to act quickly. But it's really about removing democratic guardrails and making it easier to cut backroom deals with powerful corporations.'
He said Ontario should focus instead on building out new electricity supply, especially from renewable sources like wind and solar.
The Ford government has previously taken steps to weaken independent oversight in the energy sector.
Last year, the province passed the Keeping Energy Costs Down Act, which gave it the authority to override decisions by the Ontario Energy Board — including one that blocked Enbridge from passing expansion costs onto customers.
Ontario Liberal energy critic Ted Hsu said prioritizing grid access for major economic projects makes sense — but only if done transparently and free of partisan influence.
'Otherwise, we are opening ourselves up to cronyism, corruption and economic inefficiency,' Hsu said. 'We've seen them time and time again not being able to resist the urge of helping insiders, so I am wary to trust the government if, and when, they say that no influence will occur.'
Hsu added that investor confidence could be damaged if energy access depends on lobbying the government.
Energy expert: 'Not entirely novel, but potentially risky'
Energy policy expert Adam Fremeth, the E.J. Kernaghan chair in energy policy at Ivey Business School, said the legislation isn't entirely unexpected — it aligns with Ontario's newly released integrated energy plan.
He said jurisdictions across Canada are aggressively courting data centres, and this may be Ontario's attempt to bring discipline to a competitive space. But the real test will come in how the rules are implemented.
Fremeth also cautioned that centralized decision-making must be paired with robust independent oversight — especially by the Ontario Energy Board — which he said is increasingly being sidelined.
'This sector is highly politicized — and it's difficult to remove politics from energy decisions in Canada,' Fremeth said. 'But the system we have is the one we must work with, and that makes strong, independent oversight even more important going forward.'
Like Hsu, Fremeth warned that private investors may avoid Ontario if energy decisions appear too politicized. He cited the Ford government's 2018 cancellation of 750 renewable energy contracts — including nearly completed ones — as a red flag that undermined investor trust.
The Ford government says data centres could account for 13 per cent of new electricity demand in Ontario by 2035. Overall demand is expected to jump 75 per cent by 2050, driven by electrification and economic growth.
According to the Independent Electricity System Operator, meeting that demand could require up to $400 billion to more than double the province's electricity generation capacity — from 42,000 megawatts today to 88,000 by mid-century.
Fremeth said while grid access matters, the bigger concern is whether Ontario will generate enough electricity to meet growing demand in the first place.