With no support from Ottawa, 300-employee Kapuskasing papermaker begins winding down operations
Kap Paper announced it is idling operations at its Kapuskasing facility in northeastern Ontario.
A Sept. 29 news release from the papermaker said the decision was made after years and months of discussion with governments and partners.
“This is a heartbreaking day for our people and community,” said company CEO Terry Skiffington in a statement.
“We have done everything in our power to keep the mill operating.”
Approximately 300 people work at the mill, located nearly two hours northwest of Timmins.
Skiffington said while there have been productive discussions with the province and feds on what mid- and long-term support could be available, nothing more immediate is available at this time.
He was not immediately available for comment, but a spokesperson for Kap Paper could not confirm if the shutdown is permanent or if the mill is being placed on care and maintenance in preparation for the asset to be sold.
Last month, the Carney government announced $1.2 billion in support for the tariff- and duty-hit softwood lumber industry in Canada. There appears to be nothing on the immediate horizon to keep Kap Paper afloat. The Ontario government has been provided loan extensions.
The company said in the release that they have approached Ottawa for support for a long-term solution through the federal Strategic Response Fund, but “the timing doesn’t appear to be aligning for an immediate solution to keep the mill operational.
“Unfortunately, Kap Paper does not have the resources to continue operations and are forced to idle our operations.”
Ontario Natural Resources Minister Mike Harris said the province is throwing up its hands as well, saying “there is no sustainable path to long-term viability without continuous significant financial assistance.”
“Our government has worked closely with Kap Paper to help protect jobs at the Kapuskasing Paper Mill, providing more than $50 million to help cover operating expenses and provide business supports to help the company establish a viable, long-term plan,” Harris said in a statement.
“We have continuously pushed the federal government to come to the table as an equal partner, standing up for Canadian forestry jobs and treating Ontario forestry workers fairly. We are deeply disappointed that the federal government has failed to join us in providing the immediate support required to keep Kap Paper operating, as Ontario has done repeatedly to date.”
The provincial natural resources ministry had been calling on Ottawa to match them dollar for dollar in showing support for the struggling newsprint and bulk paper mill. Company management had plans to keep Kap Paper financially viable with a proposed co-generation facility that would take in and consume biomass from other sawmills in the area.
Harris said the province can’t provide indefinite assistance without Ottawa’s help. He said the government is turning its attention to the impacted workers and their families, and will work with the company, local unions and local government to do so. A Rapid Re-employment and Training Service program has been activated.
“We fully expect and will continue to advocate for the federal government to join us in supporting forestry sector workers,” said Harris.
Kap Paper management thanked the Ontario government for its support over the last two years, including loans that have provided short-term stability for the mill.
The company said an orderly wind-down of operations will take place to ensure worker and environmental safety.
“Our employees are the best in the North, and our priority now is supporting them with dignity and clarity,” said Skiffington. “We will keep engaging with unions, municipal leaders, Indigenous partners and government to minimize impacts and to safeguard as much future opportunity as possible.”
Kap Paper is the last consumer of chips and biomass in northeastern Ontario. Domtar’s Espanola paper mill was permanently closed in 2023 and purchased by the BMI Group earlier this year.