New 400MW AI data center proposed for Algoma, Ontario by Algoma Steel and Red Jar Energy Partners

Algoma Steel and Red Jar Energy Partners have announced plans to develop a 400MW AI data center in Algoma, Ontario, Canada, marking one of the largest proposed digital infrastructure projects in the region. The facility, slated for the city of Sault Ste. Marie, is targeted for operation by October 1, 2029, though the companies have yet to make firm commitments, according to statements published by local news outlets last week.

The proposal comes at a time when Ontario is positioning itself as a competitive hub for data center development, driven by surging demand for AI computing capacity. Ron Dizy, managing director of Red Jar Energy Partners, said the companies are seeking an early position in the Independent Electricity System Operator queue to facilitate an early technical assessment of the potential project. He noted that the initiative would be subject to local approval processes, including the recently published Ontario Data Center Playbook, which outlines the government's strategic priorities for evaluating data center proposals in the province.

However, Dizy and other company executives acknowledged that the guidelines have not yet been finalized, leaving uncertainty about which specific approval processes would apply to future projects. This regulatory ambiguity is further complicated by a recent municipal decision: on Monday, The Sault Star reported that Sault Ste. Marie's city council passed a motion to prepare an interim control bylaw that would impose a moratorium on data center development until a comprehensive data center framework is established.

Algoma Steel, founded in 1901, is an integrated primary steel producer headquartered in Sault Ste. Marie and a key local employer. Laura Devoni, the company's vice president of human resources and corporate affairs, emphasized the firm's deep ties to the community. "Algoma Steel has shared this city's resources for more than a century," she said. "We recognize the community interest in data center development and the important questions regarding electricity requirements, infrastructure, environmental impacts, and the potential benefits to Sault Ste. Marie and the surrounding region."

Red Jar Energy Partners, based in Ontario, specializes in developing energy and environmental infrastructure projects. The company has prior experience in the data center sector, having developed and built a 100,000 sq ft (9,300 sqm) facility for mining operations in 2021, which was subsequently sold in 2024. The proposed 400MW AI data center would represent a significant scale-up from that earlier project and underscores the growing convergence between energy development and large-scale digital infrastructure in Canada.

Industry observers note that the project's success will depend heavily on resolving power supply and regulatory hurdles, particularly given the city council's recent move toward a moratorium. If realized, the facility could bolster Ontario's position as a destination for AI-driven data center investment, but the path forward remains contingent on alignment between provincial guidelines, municipal approvals, and grid capacity planning.