Bill 40: Ford Government Fast-Tracks Data Centre Grid Access, Strips Municipal Vote on Utility Deals

Ontario's electricity system has long run on a non-discriminatory connection principle: whoever is ready to connect, connects, on the same terms as everyone else. Bill 40 breaks that principle for one category of customer — large "specified load facilities," effectively data centres — by creating a new s.28.1 mechanism in the Electricity Act that lets the government set special connection requirements, and lets the Minister of Energy and Mines, Stephen Lecce, approve or prioritize which projects get to connect. That is a meaningful transfer of discretionary power to cabinet and a single minister over who gets to plug into a public grid (Bill 40, Legislative Assembly of Ontario).

The bill arrives amid a wave of hyperscale data centre proposals across Ontario, driven largely by AI infrastructure buildout. Canada's National Observer mapped the scale of the proposed boom, finding some individual data centre projects would draw as much power as roughly a million homes (National Observer, "One data centre or one million homes?"). A follow-up investigation found Lecce did not respond to three requests to address concerns that this data centre growth — enabled by Bill 40's priority-access mechanism — could raise residential electricity bills and increase reliance on natural gas power generation, worsening air pollution. Climate Fast organizer Anna Hardie is quoted warning the framework could push Ontario toward more gas-fired generation to meet data centre demand (National Observer, "Ontario politicians and residents take issue with AI's gas usage").

Bill 40 also quietly removes a local democratic check unrelated to data centres: under the amended Municipal Franchises Act, municipalities no longer need elector approval to pass by-laws granting public utility franchises — they can do so unilaterally. Law firm client alerts from McCarthy Tétrault, Blakes, Torys, and Aird & Berlis all confirm these mechanics, though they are commercial advisories, not evidence of public controversy in themselves (Torys, "Key takeaways and next steps on new energy law"; McCarthy Tétrault, "Bill 40 Receives Royal Assent").

With a minister now empowered to prioritize data centre grid connections, Ontario's electricity system moves toward a two-tier model: ordinary ratepayers under the old non-discriminatory framework, and a favoured class of energy-intensive facilities whose access can be shaped by cabinet discretion. Critics quoted by National Observer warn the downstream effect is more reliance on natural gas peaker plants to meet the new demand, which pushes against Ontario's own emissions targets and risks higher bills for residential customers who don't benefit from the data centres themselves (National Observer).

The removal of elector approval for municipal utility franchise by-laws is a smaller but structurally significant change: it takes a public-consultation checkpoint out of local utility decision-making at the same time the province is centralizing power over who gets grid priority. Both changes point the same direction — less local and public input, more discretionary authority concentrated with the minister and cabinet.

As of this writing, Minister Lecce has not publicly responded to repeated requests to address the electricity-bill and air-pollution concerns raised about the data centre buildout his own bill enables. Whether the government issues clearer public rules for how "specified load facility" priority will be granted — or continues to make those calls case-by-case — will determine how much of this remains a live accountability question versus settled policy.