Two weeks have passed since Hamilton councillors voted 10-6 against an interim control bylaw (ICBL), or a moratorium, on AI data centres, while the city updates its rules for the controversial new facilities.
In the days since, Saskatoon, Miramichi, Toronto, Alberta’s Rockyview County, and Mississauga are moving forward with efforts to regulate the industry.
In light of this, Hamilton suddenly looks like a laggard.
Days after Hamilton’s July 15 vote, an incident described as a “chemical spill” was discovered at a data centre in neighbouring Cambridge, which garnered federal funding last year as part of Canada’s Sovereign AI Compute Strategy.
The U.S.-owned, 60-megawatt facility uses closed-loop cooling, often touted as a fix for data centres’ well-known water consumption issues.
Ascent TOR1 data centre in Cambridge
A spill at a Cambridge data centre is believed to be a “bacterial bloom” in a retention pond on the property.
Mathew McCarthy/Waterloo Region Record
At Mayor Andrea Horwath’s special information session, scheduled the day before councillors voted down a moratorium, data centre proponents referred to the modern water-cooling systems as “industry best practice.”
But experts, along with many Hamilton residents who delegated at city hall weeks earlier, say such systems are associated with leaks of PFAs (a.k.a. “forever chemicals”) into local watersheds.
Earlier this year, data centre operators in Cheyenne, Wyo., flushed a closed-loop system and inadvertently released a rare and deadly bacterium into the town’s wastewater system, which had to be shut down for months.
In Cambridge, after nearly two weeks without identifying the substance that will eventually end up in the Grand River, the data centre’s owner now says the milky-white discharge is a “bacterial bloom.”
The province hasn’t confirmed this, but is telling the public there it has not identified any “contaminants of concern.”
Given the industry’s penchant for signing NDAs with local governments, the secrecy could be a sign of things to come in places that fail to put appropriate guardrails around AI data centres.
In voting down a moratorium, Hamilton councillors claimed to weigh such environmental and health risks against legal and fiscal considerations. But their arguments, questionable at the time, have aged like milk.
Simultaneous — and contradictory — threats were issued by data centre proponents and their apparent allies on council in the days and weeks leading up to the July 15 vote.
Claims abounded that Hamilton would see legal action from developers whose projects are too urgent to be regulated, but also that Hamilton would miss out on investment as those same developers “take their business elsewhere” (like so many Yelp-users of the mid 2010s).
By now it’s clear Hamilton wasn’t out on a limb, as some councillors seemed to fear.
We were leading a national wave of municipal solidarity against an industry out of control and a federal government intent on enabling it.
If developers will take their business elsewhere in response to prudent regulation, it’s worth asking where, exactly, they expect to go.
In Mississauga, developer Prologis openly issued the threat of litigation in council chambers, promising not to proceed so long as the council agreed to an “informal pause” lacking any legal enforcement mechanism.
One councillor brought up a talking point previously heard in both Hamilton and Burlington, framing an ICBL as a drastic, heavy-handed measure, a “blunt instrument” being wielded carelessly.
But others politely listed multiple examples of Mississauga using ICBLs in the recent past, and the sky not falling.
In the end, Mississauga council voted 15-0, directing staff to draft an ICBL for AI data centres.
The following day Toronto passed two unanimous motions, voting 25-0 to slow development and raise scrutiny on planned AI data centres in Scarborough and Etobicoke.
These were treated as routine, even obvious decisions. There was no hand-wringing about overstepping jurisdiction, or pearl-clutching about “reputational risk” that due diligence and good governance will supposedly bring.
Councillors in these cities clearly understand the reality of the situation. There is greater risk in not listening to constituents and experts than in inconveniencing a few monied interests whose incentive is to obfuscate and muddy a full informational picture.
It’s getting tougher to argue that investment will go elsewhere as a flurry of other municipalities move rapidly toward implementing sensible regulation, and threats of legal action or jurisdictional-overstep from the upper levels of government lose potency each time they fail to materialize.
Meanwhile, resident concerns around data centres’ harms are proving to be justified, again and again.
It is deeply embarrassing that Hamilton city council fell for proponents’ empty promises and fear-mongering.
Councillors in Oakville, Cambridge and at least a dozen other Canadian municipalities are now having this conversation. In the U.S., more than 500 places now have moratoria or outright bans on AI data centres.
So what happens now?
Will councillors dig in their heels and defend the corner they and Mayor Horwath have painted themselves into? Or will they learn from this experience and try to rebuild trust with the people who hired them?
