Northern Ontario paper mill to idle operations, citing lack of financial support

A paper mill in northern Ontario will begin winding down operations after failing to secure immediate financial support from the federal government, the company announced Monday.

Kap Paper said it has received $50 million in loans from the Ontario government, which helped provide short-term stability. It said it had approached Ottawa for funding, but the timing “doesn’t appear to be aligning” for a solution to keep the Kapuskasing mill open.

Kap Paper CEO Terry Skiffington called the situation “heartbreaking” for the paper mill employees and the community.

“We have done everything in our power to keep the mill operating,” Skiffington said in a statement. “While we have had productive discussions with both levels of government, and mid-to long-term support could be available, it doesn’t appear that immediate support is available at this time.”

A spokesperson for Kap Paper said about 420 people are employed directly through the company and a total of 2,500 jobs in the region depend on its operation.

The provincial government said it has provided Kap Paper with millions to help cover operating expenses and is “disappointed” that the federal government has failed to join in providing immediate support.

“We have continuously pushed the federal government to come to the table as an equal partner, standing up for Canadian forestry jobs and treating Ontario forestry workers fairly,” a joint statement from provincial Natural Resources Minister Mike Harris and Associate Forestry Minister Kevin Holland said.

“Our government is focused on supporting impacted workers and their families, and will continue to work closely with Kap Paper, local unions and local governments to do so.”

The province said it is ready to help affected workers through the province’s re-employment and training programs.

The Canadian Press has reached out to the federal government for comment.

This report by The Canadian Press was first published Sept. 29, 2025.

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