Kap Paper plans to idle its Kapuskasing, Ontario mill, beginning an orderly wind down that the company and local officials say follows unsuccessful efforts to secure near-term federal assistance.
The move caps weeks of uncertainty around one of Northern Ontario’s anchor industrial employers and puts fresh strain on a regional supply chain that depends on the mill’s intake of wood residuals and output of paper grades.
Ontario’s Natural Resources Minister Mike Harris and Associate Minister of Forestry and Forest Products Kevin Holland said the province has repeatedly stepped in and is “deeply disappointed that the federal government has failed to join us in providing the immediate support required to keep Kap Paper operating.”
Queen’s Park says it has provided more than $50 million in loans and business supports aimed at stabilizing the operation while a long term plan was evaluated.
Provincial programs to help affected workers have been activated, including rapid re-employment services and training supports.
The ministers said the province cannot keep funding the mill on its own and called on Ottawa to participate in a shared solution for the forestry sector.
Organized labor is also pressuring the federal government to act. Unifor, which represents workers at the Kapuskasing mill, urged Ottawa to provide funding to prevent a permanent curtailment and warned of spillover effects for sawmills, contractors, truckers, and other businesses tied to the site.
The union noted that the mill had received provincial support in recent years and said it had expected similar strategic funding at the federal level, but nothing materialized in time to sustain operations.
Unifor said its Local 89 and Local 256 represent 170 members at the facility.
The federal backdrop has shifted this month with the launch of the Strategic Response Fund, a $5 billion program designed to help firms manage tariff and trade pressures, retool, and protect domestic capacity.
The government billed the SRF as part of a broader effort to shore up strategic industries and supply chains.
It was not immediately clear whether Kap Paper had applied to the program or whether timing and eligibility would align with the mill’s needs.
When a hub like Kapuskasing pulls back, sawmills can lose a buyer for residuals and trucking firms lose tonnage, while forest management plans may need to be rebalanced to match reduced intake.
Unifor’s warning about knock-on effects mirrors what local officials have said repeatedly in recent months as they sought joined up action from both levels of government.
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GreenFirst Forest Products said it will temporarily curtail operations at sawmills in Kapuskasing, Hearst, and Cochrane beginning October 6, with the Kapuskasing curtailment potentially lasting longer due to site specific challenges.
