The looming threat over Kap Paper’s Kapuskasing mill has materialized: the company has declared that it will initiate an orderly idling of operations due to a lack of immediate fiscal solutions.
This move jeopardizes 170 direct jobs and risks impacting hundreds more in the surrounding region, prompting strong responses from both the provincial government and the union Unifor.
The mill is a key link in the region’s supply chain, consuming wood residues and chips from local sawmills. Its closure could trigger a domino effect across the forestry sector in northeastern Ontario.
Unifor demands immediate federal intervention
Unifor, representing close to 170 employees at the mill, is calling on the federal government to step in with urgent support.
“Kap Paper has received provincial backing over the years and expected strategic support from the federal government, but nothing came through in time,” said Lana Payne, national president of Unifor.
The union argues that the shutdown not only threatens local jobs but undermines broader policy goals like Canada’s housing supply, which depends on a sturdy supply chain of wood and paper products.
“We can’t achieve that without plants like Kap Paper,” added Samia Hashi, Unifor’s regional director for Ontario.
Ontario presses Ottawa to act
Ontario notes that it has already contributed CAD 50 million in loans over the last two years to sustain the plant.
The provincial government has also activated worker support programs such as POWER Centres, Better Jobs Ontario, and skills development funds to assist displaced workers. However, provincial officials have expressed frustration over Ottawa’s inaction, stating they cannot continue propping up the mill alone.
Regional ripple effects and uncertainty
Shuttering Kap Paper’s operations would disrupt many downstream businesses — from sawmills and transporters to wood suppliers — that rely on its demand for raw materials.
Although Kap Paper has sought assistance through federal programs like the Strategic Response Fund, timing and eligibility issues prevented aid from arriving in time.
As Ontario continues to pressure the federal government, communities and workers wait to see whether the shutdown will be temporary or permanent.
