Ontario Investing to Protect Forestry Jobs at Kap Paper

Province helping keep northern workers on the job in the face of U.S. tariffs on Canada’s forestry sector

The Ontario government is investing an additional $16.8 million to support the continued operation of the Kapuskasing Paper Mill, protecting nearly 300 forestry jobs at the mill along with thousands of indirect jobs in the regional forestry sector. Ontario is making this support available following weeks of provincially-initiated joint discussions between the province, Kap Paper and the federal government, after which the federal government has agreed to come to the table with $12 million in new support.

“Our government has been at the table from day one, stepping up again and again to protect good-paying jobs in Kapuskasing and across Ontario’s forestry sector,” said Kevin Holland, Associate Minister of Forestry and Forest Products. “We have been clear that Ontario cannot do this alone, and I want to thank the federal government for joining Ontario to help secure the future of Kap Paper, and the workers and northern communities that depend on it.”

Ontario helped bring together representatives from the Government of Canada, the Government of Ontario and Kap Paper executives to discuss a path forward for the company and strengthen Ontario’s forest sector. These collaborative discussions focused on keeping the mill operational while exploring long-term solutions to stabilize the business and protect forestry jobs across northern Ontario. The collaborative funding approach announced today is meant to stabilize the mill’s operations in the short term while the company continues its work to develop a long-term viable strategy to keep its doors open, including diversifying products and modernizing operations.

As a critical part of the forestry supply chain in northeastern Ontario, Kap Paper’s continued operation will protect 2,500 direct and indirect forestry jobs at regional sawmills and across the forestry sector. Kap Paper and its workers are also a critical part of the local municipality’s revenue base and important to economic development across the region.

“As the forestry sector faces growing uncertainty due to U.S. softwood lumber duties and tariffs, Ontario is continuing to do what it takes to protect these vital jobs in the North,” said Mike Harris, Minister of Natural Resources. “After weeks of strong advocacy and many discussions, we appreciate that the federal government has joined us in standing up for workers and families that depend on forestry jobs.”

In the face of increased U.S. softwood lumber duties and tariff threats, Ontario continues to protect forestry jobs and build a stronger, more resilient forestry sector through record investments, including:

• A further $10 million investment to help sawmills compete in a changing global market
• Over $72 million through the Forest Sector Investment and Innovation Program to boost productivity, innovation and expand into new market opportunities
• Nearly $50 million through the Forest Biomass Program to increase wood harvest and find new uses and markets for Ontario wood
• An additional $20 million this year through the Provincial Forest Access Roads Funding Program, bringing total funding to over $79 million
• Close to $3 million for wood-based construction education, research and training led by organizations such as the Canadian Wood Council and Canadian Wood Construction Research Network, to support building with wood
• Over $25 million in electricity rate relief for forestry businesses through the Northern Energy Advantage Program in 2024-25

Ontario’s actions deliver on the government’s Sustainable Growth: Ontario’s Forest Sector Strategy and the Forest Biomass Action Plan, as part of its plan to protect good jobs, attract new investments and build resilient, self-reliant northern communities.