Smiths Falls council is weighing in on Ontario’s proposed Data Centre Playbook as the province develops a framework for the rapidly growing industry.
A report presented to council Sept. 8 said Smiths Falls’ central Eastern Ontario location and its proximity to the 500-kV transmission line between Greater Napanee and Ottawa could make the area attractive for future data centre development. A project outside town boundaries could also draw from the same electrical grid needed to support the town’s future growth.
Mayor Shawn Pankow said the town has an opportunity to help shape the provincial playbook before the issue lands closer to home.
“There’s always a possibility we could have inquiries, we could have something that may land in or around our community,” he said.
Manager of Development Services Karl Grenke told council the rapid growth of cloud computing, digital storage and artificial intelligence is increasing demand for data centres, which house computer systems used to store, process and transmit digital information.
“We do have a role and that’s managing land use and development,” Grenke said. “We should have an important seat at the table when these proposals happen.”
Grenke said the town wants environmental sustainability to be considered as its own category within the provincial framework, along with clarity on how municipalities can recover development-related costs, and defined performance, technical and emergency-response standards.
According to the report, data centres can require large amounts of electricity, land and water relative to the size of their workforce.
“There’s not a huge employment footprint on the data centre,” Grenke said.
Ontario has said more than 6,500 megawatts of proposed data centre projects were seeking connection to the grid as of mid-2025, equivalent to about 30 per cent of Ontario’s 2024 peak electricity demand. The figure reflects overall provincial demand rather than any specific development in or near Smiths Falls.
The town’s report also cited Independent Electricity System Operator projections that data centres will account for 13 per cent of new electricity demand and four per cent of Ontario’s total anticipated demand by 2035, more, the report said, than the demand forecast to serve the one million new homes expected to be built by then.
For Smiths Falls, another consideration is its limited supply of land available for future employment growth. The town’s draft Official Plan sets a target of 20 jobs per net hectare in employment areas. Staff said data centres generally have lower employment densities than traditional industrial uses because they are highly automated.
Coun. Peter McKenna said municipalities have learned more about data centres in recent years as the technology has evolved.
“We’re fortunate that we haven’t been approached in the last five years to develop this because all of the country has learned so much more,” he said, pointing to newer facility designs he said are “apparently more environmentally friendly” and have less impact.
“They are important to any country’s growth and development,” McKenna said. “How many we need, I’m not sure.”
The province’s proposed framework currently places environmental impacts under a broader pillar addressing community investment and public confidence. Smiths Falls staff are asking that sustainability, covering electricity demand, water use, greenhouse gas emissions and regional infrastructure capacity, be established as its own pillar instead.
“I thought in the three pillars in the question, the one about the environment was kind of tagged onto the end,” McKenna said, telling Grenke the town’s response put it “front and centre, back where I think it belongs.”
The town’s submission also calls for clearer provincial rules around public consultation, community benefits, municipal cost recovery, technical standards and emergency response planning.
Some Ontario municipalities have moved to temporarily prohibit data centres while they establish land-use regulations. Coun. Jay Brennan questioned taking that step while the province is still developing its playbook.
“I think that they might be a little premature since the province is just putting this playbook together and, thankfully, they’re asking for our input,” he said.
Council did not support every element of the staff’s draft response.
Grenke’s draft had called for formal municipal support before the province considered grid connections for large-scale projects.
Coun. Chris McGuire objected, saying he expects the province to provide a framework “the same way it does for any other development application,” with the province defining what is allowed and how the use is classified.
Requiring formal municipal support, he said, “goes a step further” than the control municipalities have over most other development.
Pankow said a data centre proposal could be handled through the existing Official Plan and zoning process, similar to other industrial development. He noted that while a data centre may create fewer jobs than another industrial use, its property assessment could be significant.
“The tax revenue to the municipality could be very high based on a per-acre basis,” he said.
Council directed Grenke to remove the formal municipal-support requirement from the town’s response.
Smiths Falls does not currently have a zoning definition for a data centre. Grenke said the town would likely need to amend its zoning bylaw, create a definition and potentially establish specific regulations for the land use if a proposal were received.
Staff said the town is not taking a position for or against data centre development. The goal is a provincial framework giving municipalities practical tools to evaluate proposals that come forward.
“Economic benefits are important, but investment alone should not determine whether a proposal is appropriate,” the town’s submission states. “The question should be whether the development aligns with the community’s objectives, can be supported by available infrastructure, and provides a reasonable balance between local benefits and broader impacts.”
“It’s all new ground for everybody,” Brennan said. “It’s a brave new world.”
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