{"id":222439,"date":"2025-10-18T14:55:08","date_gmt":"2025-10-18T14:55:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/222439\/"},"modified":"2025-10-18T14:55:08","modified_gmt":"2025-10-18T14:55:08","slug":"northern-ontario-paper-mill-to-restart-after-29-million-bailout-from-provincial-federal-governments","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/222439\/","title":{"rendered":"Northern Ontario paper mill to restart after $29-million bailout from provincial, federal governments"},"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 said last month that it would have to idle operations after failing to obtain emergency government support.AARON VINCENT ELKAIM\/The New York Times<\/p>\n

The owner of an idled paper mill in Kapuskasing, Ont., says it will restart operations and recall the mill\u2019s 300 employees \u201cas soon as operationally possible\u201d after receiving a government bailout.<\/p>\n

The Ontario<\/a> government, which provided more than $50-million in funding to Kap Paper over the past two years, committed to paying another $16.8-million \u201cto stabilize the mill\u2019s operations in the short term.\u201d The federal government agreed to provide $12-million. <\/p>\n

Dave Plourde, mayor of Kapuskasing and a director of the company, said those funds could last through Christmas and possibly longer while Kap Paper drafts a long-term restructuring plan for the century-old mill.<\/p>\n

\u201cIt provides the ability to breathe, maybe just for a brief period of time, while we get back to work,\u201d he said.<\/p>\n

Ontario\u2019s Natural Resources Department said the mill employs 300 and supports 2,500 direct and indirect jobs at nearby sawmills and throughout the region. Sawmills produce wood chips, bark and other byproducts, which are often sold to pulp and paper plants.<\/p>\n

\u201cAs the forestry sector faces growing uncertainty due to U.S. softwood lumber duties and tariffs, Ontario is continuing to do what it takes to protect these vital jobs in the North,\u201d said Mike Harris, the province\u2019s Natural Resources Minister, in a statement.<\/p>\n

U.S. alleges Canada is subsidizing softwood industry with $1.2-billion in funding<\/a><\/p>\n

Kap Paper announced the mill\u2019s idling late last month<\/a>, citing a failure to obtain emergency government support. The Ontario government said it couldn\u2019t indefinitely finance the company, and demanded the federal government step in. <\/p>\n

By agreeing to continuing to finance Kap Paper\u2019s restructuring, the two governments have accepted a task the private sector has refused. The mill\u2019s previous owner, GreenFirst Forest Products Inc., divested itself of the struggling mill last year. Kap Paper, the result of that spinoff, has struggled to acquire bailout funding ever since.<\/p>\n

Guy Bourgouin, the Ontario NDP\u2019s forestry critic and MPP for Mushkegowuk-James Bay, said the mill is crucial for the region\u2019s sawmills. <\/p>\n

\u201cWe went down from 20 paper mills to three in Ontario,\u201d he said.<\/p>\n

\u201cSomebody has to step up and save this industry, and the province and the feds can work with industry to turn themselves around.\u201d<\/p>\n

Kap Paper\u2019s management has disclosed little about its options for restructuring, and did not respond to an interview request from The Globe and Mail on Friday. <\/p>\n

In statements this year, the company indicated it wants the mill to become an \u201cenergy super facility\u201d that would \u201csupport Ontario\u2019s need for incremental green electricity.\u201d Mr. Plourde said the company wants to construct a 40-megawatt cogeneration plant that would burn forest biomass to generate electricity. But that would require a power purchase agreement, which the province has been reluctant to provide.<\/p>\n

Ottawa rolls out $700-million loan package for softwood industry<\/a><\/p>\n

\u201cA cogen plant beside the facility is something we should still be looking at,\u201d Mr. Plourde said. <\/p>\n

Another option is to produce bleached chemi-thermomechanical pulp (BCTMP), which is used to make packaging such as food cartons and shipping boxes.<\/p>\n

The mill dates from the establishment of the Spruce Falls Co. in 1920. It survived the Great Depression, forest fires and labour strikes, all the while struggling to remain competitive through periodic modernizations. <\/p>\n

GreenFirst acquired the mill in 2021 when it bought the lumber assets of Rayonier Advanced Materials Inc. for US$232-million. GreenFirst intended to become a \u201cpure play\u201d lumber company, and warned shareholders that the paper mill\u2019s customers, which included publishers of newspapers, magazines, books and catalogues, were themselves locked in downward spirals as websites, social media and other technologies grew in popularity. <\/p>\n

Kap Paper is now owned by Kap Corp., whose largest investors lately have included forestry giant Interfor Corp., investment adviser Senvest Management LLC, and Fundamental Global Inc., a Nevada holding company with headquarters in Mooresville, N.C., that promotes cryptocurrencies and other digital assets.<\/p>\n

GreenFirst sold $14-million of wood chips to Kap Paper last year, representing nearly 5 per cent of its total revenues. During a conference call in December, 2024, GreenFirst president Michel Lessard said the company didn\u2019t anticipate difficulties finding alternative buyers; it had already found new customers, for example by selling more chips in Quebec.<\/p>\n

GreenFirst also has a 20-year contract with Rayonier Advanced Materials, under which Rayonier bought wood chips from GreenFirst for its Temiscaming High Purity Cellulouse plant. Although Rayonier shuttered its Temiscaming plant, it remains obliged to purchase GreenFirst\u2019s chips.<\/p>\n

Interfor increases planned cuts to lumber production in Canada and the U.S. amid weak market conditions<\/a><\/p>\n

GreenFirst has a biomass cogeneration plant at its Chapleau, Ont. facility; the province recently awarded GreenFirst $3-million to upgrade that plant. The company is also exploring the possibility of creating a torrefied pellet plant, with $130,000 in funding from the province.<\/p>\n

\u201cThere\u2019s many things on the table,\u201d Mr. Lessard said on the conference call. \u201cWe remain very confident and we have different plans, different opportunities, so we don\u2019t see that as a problem in the future.\u201d<\/p>\n

Mr. Plourde said the Kapuskasing mill\u2019s main strength is that its sources of wood fibre are nearby, which reduces transportation costs. <\/p>\n

\u201cThe fact that we have a sawmill right in our backyard, and a sawmill 100 kilometres to the east, and a sawmill 100 kilometres to the west, is really an advantage. And that\u2019s the whole reason that we\u2019ve been able to last this long.<\/p>\n

\u201cI think we can weather this storm and get through to see another day.\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":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-222439","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","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-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","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-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/222439","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=222439"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/222439\/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=222439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=222439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=222439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}