Kap Paper plans to shut down its Kapuskasing, Ontario mill, starting an orderly process that the company and local officials say is the result of unsuccessful attempts to get short-term federal help.
The move ends weeks of uncertainty about one of Northern Ontario’s main industrial employers and puts more stress on a regional supply chain that relies on the mill to take in wood waste and make paper grades.
Mike Harris, Ontario’s Minister of Natural Resources, and Kevin Holland, Associate Minister of Forestry and Forest Products, said that the province has stepped in many times 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 given out more than $50 million in loans and business support to keep the operation stable while a long-term plan was being worked out.
Provincial programs to help workers who have been affected are now in place. These include quick re-employment services and training supports.
The ministers said the province can’t keep paying for the mill on its own and asked Ottawa to help find a solution for the forestry sector that everyone can agree on.
The federal government is also being pushed to act by organized labor. Unifor, the union that represents workers at the Kapuskasing mill, asked Ottawa for money to keep the mill from closing permanently. They also warned that this would have negative effects on sawmills, contractors, truckers, and other businesses that depend on the site.
The union said that the mill had gotten help from the province in the past few years and that it had hoped to get similar strategic funding from the federal government, but nothing came through in time to keep the business going.
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Unifor said that its Local 89 and Local 256 have 170 members at the site.
The federal landscape has changed this month with the start of the Strategic Response Fund, a $5 billion program to help businesses deal with trade and tariff pressures, retool, and protect domestic capacity.
The government said that the SRF was part of a bigger plan to strengthen supply chains and important industries.
It wasn’t clear right away if Kap Paper had applied to the program or if the timing and eligibility would work for the mill’s needs.
When a hub like Kapuskasing pulls back, sawmills may not be able to sell residuals, trucking companies may lose tonnage, and forest management plans may need to be adjusted to account for less intake.
Unifor’s warning about knock-on effects is similar to what local leaders have been saying over and over again in recent months as they tried to get both levels of government to work together.
GreenFirst Forest Products said that starting on October 6, it will temporarily stop operations at sawmills in Kapuskasing, Hearst, and Cochrane. The Kapuskasing curtailment may last longer because of problems that are unique to that site.
