Several construction sites dot the downtown Hamilton landscape.
Anne Pasek is an associate professor at Trent University and the Canada Research Chair in Media, Culture and the Environment.
Nick Tsergas is a freelance journalist reporting on health, business and tech. He lives in Hamilton and was involved in advocating for the city’s data-centre pause. He runs the website stopthedatacentre.ca.
Hamilton’s City Council voted on Wednesday in support of a one-year pause on all AI data-centre development in the city. From outside, this looks like the latest manifestation of AI-backlash. It’s much bigger than that.
Hamilton is the first to confront a question all Canadian municipalities will soon face: What are the rules of the road for building AI data centres responsibly? And are such rules, to the extent they exist, appropriate for this new type of infrastructure?
City councillors from 21 municipalities across Canada have requested copies of the motion, said Nrinder Nann, the Hamilton councillor who moved to enact the moratorium.
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These are questions Canada has put off asking. We don’t have much in the way of regulatory guardrails for data centres. These facilities are governed by rules written well before the advent of AI. Hamilton is the first municipality to think about what those rules ought to be. It won’t be the last.
The debate is too often framed in binary terms. You’re for AI or against it; you support economic development or you’re a NIMBY; you are helping Canadian tech-sovereignty or you’re standing in its way. Such polarizing framing prevents us from scrutinizing the facts of a project and understanding if it’s actually a good deal for a community.
Data centres are usually treated as light industrial development. They often don’t trigger assessments of their probable impact on noise and air pollution, heat-island effects, grid stability, and rising electricity bills for households and businesses.
These are non-trivial concerns as AI infrastructure scales to have the same energy footprint of a small city. As the data-centre industry increasingly deploys NDAs and regulatory run-arounds, communities can be excluded from consultation. This creates controversy and confusion, and can lead to irreversible mistakes from local and regional governments.
Hamilton is Canada’s test-case. The city currently has three data-centre proposals.
The first is from the Digital Research Alliance of Canada, a non-profit framing its pitch as building research compute for Canadian academics and industry. The project is a partnership with private equity firm Slate Asset Management.
The second is Slate’s own separate “Steelport” proposal for a 400MW commercial hyperscale data centre.
The third involves s2e Technologies, a solar panel manufacturer that entered the data-centre business in 2024, and McMaster Innovation Park, a for-profit life sciences campus affiliated with McMaster University.
In early June, Slate Asset Management tried to fast-track its hyperscale project through the city’s Committee of Adjustment, an obscure bureaucratic backdoor. The firm’s efforts were met with record-setting opposition from thousands of Hamilton residents. Had Slate succeeded, all public consultation on its project would have been pre-emptively shut down.
Less than two weeks later, Hamilton’s Planning Committee unanimously approved the proposed one-year pause on data-centre builds.
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The saga has made our national governance gaps for AI infrastructure visible. Hamilton seems to be turning the ship, but in the towns of Olds, Alta., and Lorneville, N.B., and in many other parts of Canada, projects are moving ahead despite subpar consultation with residents and First Nations. This creates divided communities, legal challenges, and precarious projects with unclear returns.
On a broader level, the federal government’s AI strategy emphasizes zealous adoption and data-centre build-out without addressing the litany of concerns surrounding the facilities.
Some provinces threaten to compromise consultation processes. Ontario’s Bill 40 could see Premier Doug Ford intervene to approve data-centres that have been rejected by local communities. Alberta regulators are exempting projects from environmental assessments.
Municipalities are uniquely positioned to facilitate informed public debate. But their success will depend on the presence of clear standards. No one should be satisfied with companies’ nods to investment figures, or non-binding promises to follow unspecified “best practices.”
We don’t approve the construction of a new bridge on the good word of the bridge-builder, hoping that it doesn’t collapse. We enforce rules. Good rules reward good companies.
There is no rational reason to treat data-centres any differently.
Getting the rules of the road right will take time and work, which is why a pause on data-centre development is appropriate not just in Hamilton, but in other municipalities. After the first frameworks are drafted, they can serve as blueprints, taking root in cities across Canada.
Cities’ leadership and pushback create a healthy friction against such democratic lapses, marking where there are public interests being sidestepped, as well as who exactly is doing the sidestepping.