Oakville enacts data centre pause as Ontario municipalities wrestle with AI buildout

Oakville enacted a one-year moratorium on new data centres, becoming the first Ontario municipality to take the step as local lawmakers grapple with the concerns surrounding the new wave of facilities powering artificial intelligence.

Councillors also directed staff to study whether the town’s own regulations need to be updated to address potential noise, vibration and emissions issues from data centres, as well as broader land-use considerations. 

“We’re operating here not out of fear, and not in reaction to any one application,” said Mayor Rob Burton ahead of the unanimous vote in support of the moratorium at a special town council meeting Tuesday. 

“That’s our job: to be alert, and to take the measures necessary.” 

Oakville’s moratorium comes as neighbouring Mississauga is set to vote next month on its own data centre freeze and other Ontario municipalities study what guardrails they can put around new developments.

While Oakville officials said the town had no formal data centre applications, developer Hive Digital Technologies in May announced plans for a 320-megawatt AI facility in the Greater Toronto Area targeted for the second half of 2027. 

Land records indicated a Hive subsidiary purchased property in Oakville days before it made the announcement.

The councillor who represents the area where that property is located backed Oakville’s moratorium plan. Coun. Tom Adams called the town’s data centre study, “not only appropriate but responsible.” 

“Oakville deserves a clear, evidence-based understanding of how data centres interact with our electricity, our water, our wastewater and our telecommunications infrastructure, our environmental goals, our employment lands, the character of our neighbourhood, and, most importantly, the health of our residents,” Adams told a council meeting this week.

In a statement, a Hive spokesperson did not comment specifically on the moratorium but said it respected Oakville’s “right to develop a planning framework for data centre development.”

“We remain committed to Oakville and to earning the community’s trust through openness and transparency,” spokesperson Nathan Fast said in an email. 

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Competition among large tech companies such as OpenAI, Anthropic, Microsoft and Google has fuelled a surge in demand for data centres, energy-hungry warehouses packed with powerful computer chips used to train and operate increasingly complex AI models.

Canada only has a handful of large hyperscale data centres, but dozens more are in the pipeline. In July, Meta announced plans for a one-gigawatt data centre in Alberta, to be powered by a new gas plant. 

Hamilton was the first Ontario municipality to take a proposed moratorium to a vote, but it failed to pass. Mississauga will vote on its proposed moratorium next month. 

Meanwhile, Waterloo Region voted Tuesday to direct staff to study data centre impacts and potentially advocate for a provincial framework setting out how to assess and manage proposed developments. Toronto city council passed a similar motion last month.

This report by The Canadian Press was first published Aug. 12, 2026.