Northern Ontario local leaders are urging Ottawa and Queen’s Park to work together to keep Kap Paper from winding down its Kapuskasing mill, warning that the shutdown would upend a regional supply chain and erase hundreds of jobs.
At a community rally on Wednesday in Kapuskasing, Mayor Dave Plourde said the town is asking Ontario for a three-month bridge loan to give the company time to secure longer term federal financing.
He said residents have already weathered downturns in forestry and cannot afford to see the anchor employer go dark. Ottawa, through Industry Minister Mélanie Joly’s office, said it has offered supports that include the Strategic Innovation Fund and will keep working with the company on options to resume operations.
Ontario officials say the province has already put substantial money on the table and want the federal government to match it.
Kap Paper said this week it will begin an orderly idling of operations after failing to secure immediate federal support.
In a company statement, CEO Terry Skiffington called it “a heartbreaking day” for employees and the community and said management had pursued solutions with both levels of government but could not bridge the near-term funding gap.
The Kapuskasing facility produces newsprint and has a stated capacity of about 220,000 metric tons per year.
The company says roughly 420 people are employed directly and about 2,500 jobs in northeastern Ontario depend on the mill’s operation.
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Toronto-based GreenFirst Forest Products, which spun Kap Paper into a standalone entity last year, moved quickly to curtail sawmill operations in Kapuskasing, Hearst, and Cochrane for the equivalent of one week starting Oct. 6.
GreenFirst said Kap Paper is its primary customer for wood by-products, and the mill’s idling worsens the challenge of managing chips and biomass in the province.
The company added that tariffs, market uncertainty and low lumber prices are already weighing on the sector, and that the curtailment at the Kapuskasing sawmill could last longer than a week.
The province’s Natural Resources Minister Mike Harris and Associate Forestry Minister Kevin Holland said Ontario has provided more than $50 million in support to Kap Paper in recent years to cover operating costs and develop a viable plan.
In a statement this week, the ministers said Ontario cannot keep doing this alone and pressed Ottawa to act as an equal partner.
The province said it has activated rapid re-employment and training services for affected workers and pointed to programs such as Better Jobs Ontario and the Skills Development Fund.
Local officials argue the stakes extend beyond one town. Peter Politis, mayor of nearby Cochrane, said the supply chain link between sawmills and Kapuskasing’s newsprint mill makes the situation a regional problem.
Without the mill to consume wood chips and other residues, sawmills face costly alternatives that could force deeper cuts in output or employment.
Union leaders have said the federal government should step in with targeted support to stabilize the integrated forestry system that underpins housing and other policy goals.
Plourde and other leaders want a short provincial lifeline to apply for federal programs that could keep the mill running while a longer range plan takes shape. Ottawa has signaled willingness to keep talking. The province says it has already carried more than its share.
