Kap Paper will begin idling operations at its Kapuskasing facility.
The mill closure reflects the absence of near-term measures to keep the mill going, a company official said, even after months of engagement with governments and partners.
Not even a $30-million investment announced by Mike Harris, minister of natural resources, last week that included $20 million for the Provincial Forest Access Roads Funding Program and $10 million for the Ontario Sawmill Chip Support Program, could make a difference.
During that announcement, MPP Kevin Holland said the roads program in particular benefits all companies within the sector, specifically Kap Paper.
“We have been working with them for well over a year now, making significant investments into their operations to help them as they move forward to find new ways to improve the efficiencies of their business, new markets and new products,” Holland said.
Terry Skiffington, Kap Paper chief executive officer, called it a heartbreaking day for the people in the community.
“We have done everything in our power to keep the mill operating,” he told The Chronicle-Journal.
“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.”
Skiffington said Kap Paper was urged by the province to approach the federal government for a longer-term solution through the Strategic Response Fund.
“While we have initial positive responses, the timing doesn’t appear to be aligning for an immediate solution to keep the mill operational,” he said. “Unfortunately, Kap Paper does not have the resources to continue operations and is forced to idle our operations.”
Charla Robinson, president of the Thunder Bay Chamber of Commerce, said what’s happening in Kapuskasing is showing the strain that’s being seen in the forest sector right now with increases in softwood lumber tariffs this summer.
“On Tuesday morning, President Trump will now implement additional tariffs on not only softwood lumber, but upholstered wood products, kitchen and cabinets and vanities, those sorts of products,” Robinson said. “This is concerning because we know that the forest sector is such a foundational part of our economy, and this is going to add additional costs, and potentially will, will have some impacts on whether some of those products will be able to be sold across the border — and what will that mean for the actual production of those products here if the demand goes goes down.”
Robinson said the chamber is concerned about the new tariffs coming into play in a couple of weeks and urges the Canadian government to continue their efforts to find some trade agreements with the U.S. government.
The Northwestern Ontario Municipal Association (NOMA) acknowledged the previous support of the province of Ontario, which includes $50 million in loans that helped provide short-term stability and keep 2,500 workers employed.
Rick Dumas, president of NOMA, said thousands of workers, families, and businesses depend on Kap Paper.
“We are urging the prime minister and the premier to work together now, without delay, to deliver emergency support, keep the mill operating, and protect the integrated forestry supply chain that sustains our communities,” Dumas said.
“The closure would have devastating consequences, not only for Kapuskasing but also for communities across the North, including Hearst, whose local mills depend on Kap Paper to process and receive their wood residue.”
Dumas added that without immediate and co-ordinated measures from both levels of government, the region faces significant job losses, economic instability, and the collapse of a critical link in Canada’s forestry sector.
