Ottawa says it will ‘keep working’ with northern Ont. paper mill to resume its operations

We have reaction to the news that Kap Paper in Kapuskasing is closing, eliminating 300 direct jobs and endangering thousands more.

Ottawa says it will keep working to help save a northern Ontario paper mill that cited a lack of immediate federal support as it announced this week it was forced to idle operations.

Industry Minister Melanie Joly’s office says it had “come to the table” with federal supports for Kap Paper in Kapuskasing, Ont., which directly employs about 420 people and supports 2,500 jobs in the region.

It says the federal government has been working directly with the struggling company, citing support offered through the Strategic Innovation Fund and targeted programs.

‘No immediate solution’

Kap Paper said on Monday that it had received $50 million in loans from the Ontario government and had approached Ottawa for funding, but despite “initial positive responses,” there was no immediate solution to keep the paper mill open.

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

Joly’s office says it will keep working with the company on options to resume its operations.

“The closure of Kap Paper is a gut punch for the workers, their families, and the entire community of Kapuskasing,” it said in a statement on Tuesday.

“We’ve come to the table with federal supports, and we urge the provincial government to remain in lockstep with us as we continue fighting for these jobs.”

A joint statement from Ontario Natural Resources Minister Mike Harris and Associate Forestry Minister Kevin Holland said the province has “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.”

This report by The Canadian Press was first published Sept. 30, 2025.