Northern Ont. paper mill could become a victim of U.S. tariffs

Northern Ontario leaders plead with the federal government to save Kapuskasing's paper mill, warning that 2,500 jobs are at risk. Lydia Chubak reports.

The Federation of Northern Ontario Municipalities is issuing a stark warning that the Kap Paper Mill in Kapuskasing faces imminent closure without urgent financial support from the federal government.

Officials from FONOM wrote to federal officials, stating the mill could close within two weeks if funding is not secured.

A nervous wait for a response

FONOM president Danny Whalen confirmed the anxious wait for a federal response, emphasizing the growing severity of the situation.

“We’re waiting for a response,” Whalen told CTV News.

“The longer we wait, the more serious it gets … we just get more and more nervous as time drags on.”

Rollercoaster year culminates in crisis

Kapuskasing Mayor Dave Plourde described the mill’s status over the past year as a “rollercoaster ride,” underscoring the critical need for a permanent solution to protect the regional economy.

“We just need the federal government to come to the table and find a solution that’s long-lasting, ensure the 2,500 jobs that would be affected in our area,” said Plourde.

Provincial support extended

The Province of Ontario recently provided a $6 million loan extension to avert a closure previously scheduled for Sept. 10.

The province joined local leaders in calling for “long overdue support” from the federal government for Ontario’s forestry sector.

Whalen pointed to punishing international tariffs as a core issue hindering the industry.

“The levies on Canadian lumber (are) extensive -- it’s 35 per cent plus,” he said.

“That’s pretty significant, so if it’s going to face that much of a tariff at the border, then we should be using it within our own country – every level of government that’s argued that we need more homes, we need more homes – well, let’s get building homes and using Canadian lumber.”

Closure could ripple through entire forestry sector

Plourde said the mill’s closure would trigger a catastrophic domino effect, crippling the entire local forestry sector as sawmills in the region rely on the Kap Paper Mill to consume their wood by-products, such as chips and sawdust.

“If there is no place for that byproduct to go, then the mills cannot continue to produce because they stockpile these chips and sawdust in their yards and it just becomes too large for them to cope with,” Plourde said.

“Already it’s a problem because there (are) less and less consumers of that byproduct.”

Northern Ontario positioned as cornerstone of housing strategy

Northern Ontario municipal officials said they are prepared to meet with the federal government immediately to chart a path forward, arguing that with the right federal support, northern Ontario’s forestry industry can become the cornerstone of Canada’s national housing strategy.

The unified message from the region is that the time for federal action is now.