Why Hamilton councillors voted down a pause on datacentres
In only three weeks, Mayor Andrea Horwath and eight councillors flipped their votes
A manufactured outcome
It was clear the fix was in when Hamilton Mayor Andrea Horwath called a Special Council meeting, to be held the day before councillors would decide whether or not to pause AI data centre construction in the city.
The one-year moratorium, proposed to let the city update its rules for AI data centres, would have been the first of its kind in Canada.
Described as a "science-based" education session for Council, Horwath's meeting was immediately called out as looking much more like a public lobbying pitch, with each presenter financially tied to the fate of data centre proposals in the city.
One presenter, Michael Schull, heads the the Digital Research Alliance of Canada. Schull, a registered lobbyist with the city, had been in town booking private chats with councillors in the lead-up to the meeting.
At the previous session of Council, reps from McMaster University — another data centre proponent and Special meeting presenter — were openly feeding misleading talking points via text message to the lone councillor who voted "no" in a 15-1 decision to advance the moratorium, which has overwhelming public support.
The 'neutral expert'
Perhaps in response to media scrutiny, one presenter was hastily swapped out on the eve of the meeting.
The replacement, Martin Karsten of the University of Waterloo, has no known interest in Hamilton's projects being approved, but several moments caused residents to doubt his credibility, if not his impartiality.
At one point, a member of the public present in Council chambers told the Mayor "you're being lied to" when Horwath asked the audience to refrain from reacting to Karsten's statements.
There were audible laughs from the gallery when Karsten, speaking to data centre impacts, said, "I can assure you there is no noise or vibration."
If we're being charitable, maybe he was referring to one of two CPU-based data centres at UW which consume a tiny fraction of the resources required by the GPU-based facilities used for AI.
But CPU-based data centres aren't what Karsten was asked to talk to Hamilton councillors about.
Such older datacentres, which run everything from email and social media sites to Amazon, most often run on the scale of kilowatts. AI datacentres run on megawatts and gigawatts.
Most people think of data centres in terms of "hyperscale" vs "not hyperscale," unaware that hyperscale is a decade-old marketing term used by Silicon Valley's megacorps to pitch investors.
When asked about problems with closed-loop water cooling, Karsten said, "I'm not an HVAC technician." Such hand-waving is unfortunate, as these cooling systems are hailed as the solution to experts' concerns over water-use.
Closed-loop systems, however, have problems of their own, and have much higher energy needs. Energy generation itself requires water for cooling, which means that closed-loop systems can in practice, merely shift water-usage from a data centre to the data centre's power plant.
According to a Senate of Canada brief, for every gallon of water used to cool U.S. data centres in the year 2023, 12.4 gallons were used to cool those data centres' associated power stations.
And just four days after the Council vote, a chemical spill was discovered at a Cambridge, Ontario data centre, recently expanded from 6MW to 60MW, that uses a closed-loop cooling system.
The data centre's owner, Ascent — a company that says its internal governance policies promote "accountability and transparency" — has not told the public what contaminants were released in the ten days since. Waterloo Region has said the spill is contained, and that downstream municipalities were informed of the spill merely as a precaution.
Karsten's Burlington reappearance
A week after Hamilton councillors made some very regrettable decisions, 'data centre expert' Martin Karsten would pop up at Burlington City Hall as that city voted on its own moratorium. He delivered similarly incorrect statements to councillors apparently looking for any reason not to regulate a booming new industry delivering known harms to every community it touches.
He suggested that based on its size, the data centre proposal before the city was unlikely to be an AI data centre, claiming it wouldn't be economically viable. A quick search of Ontario's corporate registries determined the owner of the land also runs an AI software company.
Though Karsten's claim was repeated many times by councillors, a PR rep of the actual company, who spoke later in the day, did not corroborate it.
The dubious claim of local investment benefits
During Hamilton's "learning" session, there were occasions where councillors, seemingly fixated on pushing a particular talking point, tried (and failed) to coax a particular answer from a presenter.
One of these talking points was the idea that proximity to a data centre is advantageous to researchers, and DRAC and/or McMaster Innovation Park's facility would lead to a "clustering" benefit, driving further investment and jobs in the local area.
However, neither Schull nor Karsten could come up with much beyond hypotheticals. Schull, admitting he was not aware of any "clustering" effect from any of DRAC's existing facilities, even described how a researcher in Quebec might use a data centre in Ontario or BC, depending on the type of research they were doing.
Karsten, when asked about the issue of latency due to geographical distance from a data centre, told Ward 1 Councillor Maureen Wilson that latency may be a concern for applications like high-frequency trading, but matters little in other domains.
Wilson apparently didn't hear the answer, and continued to speak about latency problems for researchers. It's unclear where the councillor got this notion, but it definitely wasn't at the Special Council meeting.
Private and Confidential
When the Mayor's 'info-session' didn't provide a sufficient public rationale for eight councillors and the mayor to flip their previous positions, Council went into closed session for nearly three hours the following day.
The purpose of this closed session was ostensibly to discuss the legal implications of an ICBL, but according to a social media statement from Ward 3 Councillor Nrinder Nann following the meeting, there was "a lengthy debate that went beyond legal issues" not subject to public scrutiny.
The public portion of the data centre debate, meanwhile, lasted less than an hour.
Ultimately some Councillors leaned on legal advice given during the closed session that (apparently) suggested the city would likely be sued if it implemented an ICBL. There was also a legal opinion, shared by the City Solicitor, that McMaster Innovation Park might invoke a section of the Ontario Planning Act that allows "undertakings of post-secondary institutions" to be exempt from any local planning rules.
But as any good lawyer will tell you, a legal opinion is just that: an opinion. Until cases and laws are tested in court, we can't know their outcome.
Council may also have underestimated the political risk that an organization like McMaster Innovation Park would take on, in attempting an end-run around the local democratic process. The same goes for the provincial and federal governments. Do they really want to be seen as bullies, ramming through projects overwhelmingly opposed not only by local residents but by Ontarians and Canadians broadly?
Hamilton should have at least called their bluff, and sent a clear message: our communities are not to be sacrificed on the altar of investment.
And what if, despite the inevitable political fallout, a data centre proponent still decides to drag the City through an expensive legal process? Well, the worst case scenario is that Council could honestly say they tried to protect residents, and legitimately lay the blame at the feet of someone else. Ten councillors didn't even have the guts to try.
Instead, they complied in advance, telling constituents that the City doesn't have jurisdiction over noise, energy use, water use, and so on. But municipalities do have jurisdiction over land use. And many have found alternate means of serving residents in these situations.
For example, when the University of Michigan tried to override the municipality of Ypsilanti, the township cut off water to the data centre site.
Hamilton and other cities should start threatening the same if upper levels of government or large institutions are intent on pushing projects through. Hamilton fully owns energy and telecom provider Hamilton Community Enterprises — and has a large stake in Alectra, along with a few other municipalities in the region.
Cities have jurisdiction. What they sometimes lack is a spine.