The organization warned that hydro customers in the mushrooming new category \u201cgenerally did not have sufficient processes, procedures, or methods to address risks associated with computational loads\u201d and urged them to take a number of steps to urgently address the vulnerabilities they pose to the grid. <\/p>\n
Saxe, who is also a member of the Toronto Hydro Board and someone who has followed energy and satiability issues for many years as an environmental lawyer, likened the warning to a \u201c3-alarm fire\u201d from an organization that does not typically send up flares. <\/p>\n
She said the organization was \u201cbasically arm-waving to say we urgently, immediately need much better management of data centres.\u201d <\/p>\n
The risks have also included costly fires associated with data centres in the past, Saxe said. <\/p>\n
She pointed out network equipment designed to protect AI data centres from power fluctuations can have a massive impact on the grid even from small fluctuations, such as a car crashing into an electric pole. <\/p>\n
\u201cYour lights wouldn\u2019t even flicker (from the disturbance), but when you have six or seven large data centres in the same area, and they all sense the same little fluctuation at the same time, and they all trip off in 20 milliseconds (they can) bring the whole grid down,\u201d she said. <\/p>\n
The warning from NERC prompted Saxe to bring the matter to council. <\/p>\n
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Dianne Saxe Coun. Dianne Saxe is pictured in this file photo. THE CANADIAN PRESS\/Frank Gunn <\/p>\n
She drafted a motion last month urging Toronto to sign on to the Global Urban Data Centres Pact<\/a>, which aims to set a vision for data centres that is sustainable and safe. While the motion was ruled out of order at council, Mayor Olivia Chow nonetheless agreed to sign the pact on behalf of the city. <\/p>\n City staff in Toronto were already studying the issue of AI data centres after Saxe and Coun. Rachel Chernos Lin brought a motion<\/a> back in March asking for greater clarity on whether AI data centres, which can consume enormous amounts of power, should have special zoning requirements instead of being included in as-of-right industrial zoning. <\/p>\n It noted \u201cgrowing concern in our communities,\u201d in particular over questions around electricity and water consumption, increased pollution and other infrastructure impacts. <\/p>\n \u201cThe City of Toronto needs to be proactive, thinking about how best to manage data centres,\u201d Saxe told CP24.com. \u201cThey\u2019re an important opportunity. They\u2019re also a serious risk.\u201d<\/p>\n The motion asked city staff to examine all the potential impacts, as well as existing rules and regulations and report back to council early next year with recommendations about a possible regulatory framework for AI data centres. <\/p>\n Toronto is not the only municipality looking at the issue. <\/p>\n Recently, Hamilton City Council voted to put the brakes on new data centres<\/a> that power AI to give city staff an opportunity to review some of the ways the facilities impact the municipality. <\/p>\n Ward 3 Coun. Nrinder Nann, who led the charge, said in an open letter before the vote, that she opposes AI data centres as they currently operate. <\/p>\n \u201cI believe there are too many negative environmental and human health impacts that must be comprehensively addressed through stringent regulations and criteria from all three levels of government, as well as robust public engagement before they are approved in our communities,\u201d Nann wrote. <\/p>\n Electricity usage<\/p>\n Many people might not realize that their favourite AI program actually requires a tremendous amount of computing power and therefore, a great deal of electricity. The demand for that computing power has resulted in the rapid growth of AI data centres and Canada has been at attractive location<\/a> because of relatively cheap power costs, a mostly cool climate and access to renewable energy. <\/p>\n At the moment, most municipalities do not have special rules for data centres, with most of them simply falling under general industrial zoning bylaws. But that\u2019s a problem given how they have changed over the years, says Mark Daley, a professor of computer science and chief AI officer at Western University. <\/p>\n \u201cData centres used to be sort of a moderate power draw, and then they got up to the level of a large industrial facility, and now they\u2019re becoming in some power grids the primary users of electricity on that grid that\u2019s continuing to scale,\u201d Daley says. <\/p>\n \u201cSo you can imagine if you are a municipality with a fixed power infrastructure, as we mostly have in Canada, you have to think carefully about how you allocate that infrastructure.\u201d<\/p>\n With high electricity usage, there have been concerns that AI data centres could drive up the cost of power for domestic consumers, but also strain the power grid to the point of failure. <\/p>\n A recent fire at a downtown Toronto transmission station<\/a> knocked out power to much of the core and highlighted the interconnectedness \u2013 and vulnerability \u2013 of the grid. <\/p>\n Still, experts point out the data centres need to be located in relatively close proximity not only to the infrastructure needed to support them, but to the expertise that is required to build and maintain them. Typically, that means large metropolitan areas. <\/p>\n Industry says there\u2019s a way to balance needs<\/p>\n A major new data centre being constructed by Microsoft in North York highlights some of the challenges and opportunities in meeting the infrastructure demands required to support AI data centres within cities. <\/p>\n Located at the site of a former Lowe\u2019s store in the area of Islington Avenue and Rexdale Boulevard, the two-storey facility will draw power directly from Hydro One, by tunneling under Hwy. 401 to reach new junction stations designed to draw power directly from overhead transmission wires<\/a>. <\/p>\n The project, which has undergone multiple revisions with city staff since 2022, is nearing completion. <\/p>\n In a statement to CP24.com, a Microsoft spokesperson said the company believes communities \u201cshould share in the benefits of AI infrastructure, not bear the costs\u201d and pointed out it is paying for the infrastructure upgrades needed to support the new facility. <\/p>\n \u201cWe work closely with utilities, system operators, and regulators to plan energy needs well in advance and invest in efficient infrastructure,\u201d the statement read. <\/p>\n \u201cThrough our Community-First AI approach, announced in April, we are committed to ensuring our data centres do not increase electricity prices for Canadians by paying the full cost of infrastructure required to support our operations, including substations and other grid assets dedicated to provincial utilities.\u201d<\/p>\n Microsoft also pointed out it designs its data centres with energy and water efficiency in mind, with its facilities relying primarily on outside air for cooling and using water less than five percent of the year. Rainwater harvesting further offsets demand. <\/p>\n \u201cData centres are critical infrastructure that supports the digital services Canadians rely on every day – from video calls and online banking to AI-powered tools, education, research, and government services,\u201d the company said. \u201cThey also create opportunities for broader economic growth by enabling innovation, helping organizations adopt AI, and supporting local jobs and skills development.\u201d <\/p>\n Amazon Web Services (AWS), a major player in cloud computing, including AI services, did not respond to specific questions about industry regulation, but noted it has \u201cestablished data centre regions\u201d in the Montreal area since 2016 and in the Calgary area since 2023. <\/p>\n The company, which boasts tens of thousands of Canadian customers, pointed to a fact sheet that said it is \u201cproud to be committed to Canada\u2019s Net Zero Challenge as of 2026\u201d and highlighted a number of measures<\/a> it takes to mitigate the environmental impact of the centres.<\/p>\n \u201cOur sustainability work includes enhancing energy efficiency, transitioning to carbon free energy, reducing embodied carbon, using water responsibly, driving a circular economy, and enabling sustainability for customers,\u201d the company says on a site dedicated to its sustainability efforts. <\/p>\n \u201cAt AWS, we focus on efficiency across all aspects of our infrastructure. We use industry standard metrics to measure efficiency and seek the optimal balance of energy and water use.\u201d<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/07\/MHKUZKKWFVFJZGAJTGU5AIEFIY.JPG\")
AI protest People hold signs during a rally before participating in a march to protest the opening of AI data centres, in Vancouver, on Saturday, June 27, 2026. Telus is moving forward with two new AI data centres in Vancouver and the expansion of an existing facility in Kamloops. THE CANADIAN PRESS\/Darryl Dyck <\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/07\/K2HRDXLK4FFYZEWWYZWDLXBRJM.jpg\")
Microsoft Toronto data centre An artist’s rendering of a new Microsoft data centre planned for Toronto is pictured. <\/p>\n
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Vic Fedeli Ontario Minister of Economic Development, Job Creation and Trade Vic Fedeli delivers remarks during a press conference in the facilities of vaccine producer Sanofi, in Toronto on Thursday, May 30, 2024. THE CANADIAN PRESS\/Arlyn McAdorey <\/p>\n