{"id":179160,"date":"2025-09-30T03:22:11","date_gmt":"2025-09-30T03:22:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/179160\/"},"modified":"2025-09-30T03:22:11","modified_gmt":"2025-09-30T03:22:11","slug":"northern-ontario-paper-mill-to-suspend-operations-citing-lack-of-federal-support","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/179160\/","title":{"rendered":"Northern Ontario paper mill to suspend operations, citing lack of federal support"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

The paper mill in Kapuskasing, Ont., in 2017, then owned by Tembec. Current operator Kap Paper says the mill is idling its operations after failing to secure a multimillion-dollar rescue package from Ottawa.AARON VINCENT ELKAIM\/The New York Times<\/p>\n

The owner of a struggling Northern Ontario paper mill said Monday it was idling its operations after failing to secure a multimillion-dollar government rescue package.<\/p>\n

Kap Paper, whose mill has operated in the town of Kapuskasing for more than a century, said it was unable to get the short-term support it needed from the federal government even after the province of Ontario had given it $50-million in loans.<\/p>\n

The company said 420 people work at the mill and that 2,500 indirect jobs at sawmills, transport companies and other operations could also be affected by the closing.<\/p>\n

Kap Paper said in a statement that the Government of Ontario had urged it to appeal to the federal government for a long-term funding solution through its Strategic Response Fund, a program run by Innovation, Science and Economic Development Canada.<\/p>\n

\u201cWhile we have initial positive responses, the timing doesn\u2019t 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,\u201d the company said.<\/p>\n

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A spokesperson for Industry Minister M\u00e9lanie Joly had not responded to a request for comment by press time.<\/p>\n

Officials with Premier Doug Ford\u2019s Ontario government said the province is unable to keep providing funding for the operation without Ottawa\u2019s involvement.<\/p>\n

\u201cWe 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,\u201d Ontario Natural Resources Minister Mike Harris and Kevin Holland, associate minister of forestry and forest products, said in a joint statement.<\/p>\n

Kap Paper executives were not available for further comment.<\/p>\n

The company produces newsprint and bulk paper. It was spun off last year by GreenFirst Forest Products Inc., with hopes of improved prospects for restructuring as an independent company.<\/p>\n

The provincial government stepped in immediately with a $24-million term loan, which it later increased.<\/p>\n

For the first half of this year, Kap Paper reported an operating loss of $23.5-million, compared with a loss of $16.7-million for the same period a year earlier, and its cash balance dwindled.<\/p>\n

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The company attributed its declining financial position to falling demand for newsprint along with \u201cpersistent overcapacity in the North American paper market.\u201d It planned to increase exports to other countries, but acknowledged it received lower prices in those markets.<\/p>\n

Kap Paper said it was suspending operations on the same day that another Ontario industrial concern \u2013 Algoma Steel Group Inc. in Sault Ste. Marie \u2013 announced<\/a> it had secured $500-million in federal and provincial funding to help it fight the trade war waged by U.S. President Donald Trump. The dispute has decimated its order book. <\/p>\n

The mill is the only wood-chip-consuming facility in northeastern Ontario, served by three sawmills. Dave Plourde, mayor of Kapuskasing and a board member of Kap Paper, said those sawmills will likely close soon after the paper mill, hitting his community of 8,500 people hard.<\/p>\n

\u201cWithout a place to digest that, the sawmills can\u2019t work,\u201d Mr. Plourde said. \u201cSo if one goes down, and there\u2019s no place to get rid of your chips, the other one goes down immediately.\u201d<\/p>\n

For the past two years, the company had been negotiating with Ontario to secure a power purchase agreement supporting construction of a 40-megawatt co-generation plant at the Kapuskasing mill that would have consumed forest biomass, Mr. Plourde said. But the province backed away from that agreement earlier this month, he added, and \u201cindicated that they wanted engagement by the federal government.\u201d<\/p>\n

That sent the company and municipality scrambling to obtain federal support.<\/p>\n

\u201cWe engaged the federal government,\u201d Mr. Plourde said. \u201cWe got them to listen. They understood the seriousness of our plight.\u201d<\/p>\n

\u201cOur intention is to keep the dialogue going with the province, as long as we can have it.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: The paper mill in Kapuskasing, Ont., in 2017, then owned by Tembec. Current…\n","protected":false},"author":2,"featured_media":179161,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[901,888,902,879,877,903,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,43,889,890,884,904,885,909,910,44,912,907,911,905,908,882,898,899,714,897,906,865,61,41,39,42,40,900,892,886,883,913],"class_list":["post-179160","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-headlines","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-news","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-top-news","tag-top-stories","tag-topnews","tag-topstories","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/179160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=179160"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/179160\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/179161"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=179160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=179160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=179160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}