The future of hundreds of jobs in Northern Ontario has been secured as the Kap Paper mill in Kapuskasing prepares to resume operations following a combined $29 million financial aid package from the provincial and federal governments.
The mill, a crucial pillar of the regional economy, is moving toward a full restart after months of uncertainty, offering a major lifeline to its workforce and the surrounding community.
The $29 million rescue package
The financing is structured as a joint investment, reflecting a coordinated commitment from both levels of government to stabilize Northern Ontario’s forestry sector.
The Government of Ontario has committed $17 million, describing the funding as essential to “protect forestry jobs” and ensure the long-term viability of the facility. The federal government has provided an additional $12 million loan through its economic development agency for Northern Ontario. Together, the funds cover restart costs and critical operational upgrades at the plant.
Securing Northern jobs and competitiveness
The decision to fund the restart comes amid rising pressure to safeguard Canada’s resource sector jobs, particularly in remote communities where a single employer drives the local economy. The mill’s operation is vital not only for its direct employees but also for its extended supply chain — including loggers, haulers, and service contractors across the region.
News reports highlighted widespread relief following the announcement, noting the government’s intervention will help sustain economic stability in Kapuskasing and maintain the forestry sector’s competitiveness on the global stage.
With this joint effort, both Ontario and Ottawa have signaled their commitment to protecting Northern Ontario’s industrial base. For Kap Paper, the focus now turns to achieving long-term sustainability in an evolving market for fibre-based products.
Kap Paper is a pulp and paper mill located in Kapuskasing, Ontario. With a long industrial heritage in Northern Ontario, it plays a vital role in the regional economy by providing significant direct and indirect employment. The facility is considered a pillar of the community and an essential link in the province’s forest industry supply chain.
