Kap Paper to idle its newsprint mill in Kapuskasing, Ontario
Kap Paper has confirmed that it will idle production at its newsprint mill in Kapuskasing, Ontario, citing a lack of immediate financial resources to sustain operations. The announcement casts uncertainty over the future of one of Canada’s most significant newsprint facilities.
The Kapuskasing mill, with an annual production capacity of 220,000 metric tons, employs approximately 420 people directly and supports thousands more across the forestry sector in Northeastern Ontario. The site has historically been considered a vital anchor in the integrated forest products supply chain, connecting sawmills, pulp and paper operations, and by-product markets.
Terry Skiffington, CEO of Kap Paper, expressed the gravity of the situation: “With deep regret, Kap Paper today announced it will begin an orderly idling of operations at its Kapuskasing facility. This decision follows months – and indeed years – of dialogue with governments and partners. However, without immediate support measures, we cannot maintain the integrated forestry supply chain in the region. This is a heartbreaking day for our people and the community. We have done everything possible to keep the mill operating, but while discussions with government have been constructive, near-term support is simply not available.”
The company clarified in a written statement that, at the request of the Province, it had sought federal assistance through the Strategic Response Fund. While initial signals from Ottawa were positive, the timing of potential support did not align with the urgent need to keep operations running. “Unfortunately, Kap Paper does not have the resources to continue operations and is therefore forced to idle its activities,” the statement read.
The announcement came just ten days after Kap Paper had appealed publicly to the federal government, urging immediate intervention to stabilize the forestry supply chain. The company stressed that a financially viable pulp and paper operation is not only essential for local employment but also for Canada’s broader housing strategy, given that affordable and available lumber is tied to the health of the forestry industry.
“Kap Paper reiterates its call for immediate federal action,” the company declared. “We urge Ottawa to work with Ontario and industry on near-term steps that will preserve the integrated system of pulp and paper mills, sawmills, and related markets, while safeguarding 2,500 jobs across Northeastern Ontario.”
The company’s plea has received support from local associations. Earlier in the week, both the Federation of Northern Ontario Municipalities (FONOM) and the Northwestern Ontario Municipal Association (NOMA) had issued a joint letter emphasizing the importance of maintaining Kap Paper’s operations. According to these organizations, the mill plays a central role in ensuring that sawmills in the region have a sustainable outlet for wood chips, residues, bark, and tree debris.
A longer-term vision had already been under discussion, involving the development of a cogeneration facility paired with a Power Purchase Agreement. Such a project would enable the mill to diversify its energy supply while strengthening its role as the backbone of forestry operations in the region.
Kap Paper acknowledged recent measures by the Province of Ontario, including a $6 million loan extension and the creation of a structured working table involving both provincial and federal representatives. This forum is intended to explore longer-term strategies for innovation and sustainability in the sector, particularly through cogeneration.
Despite these steps, the company insists that short-term intervention is critical. “Our request is straightforward and urgent: act now to keep the supply chain intact so pulp and paper mills remain financially viable; Canadian lumber remains affordable and available to support national housing targets; and Northern communities, employees, and families can continue to have a strong future.”
The situation in Kapuskasing reflects broader challenges facing Canada’s newsprint industry, which has been under increasing pressure from declining global demand, high operating costs, and competition from other regions. For many Northern Ontario communities, pulp and paper mills are not only major employers but also pillars of economic stability and social life. The outcome of Kap Paper’s appeal to federal authorities will therefore be closely watched, both within the sector and beyond.
