The federal government has swooped in with $10 million in support funding to help Kap Paper stay afloat.
Announced Oct. 31, the FedNor money will come in the form of conditionally repayable funds. That means the grant must be repaid according to conditions outlined in the funding agreement, such as reaching certain goals.
The details of the agreement were not made public.
“Kap Paper is proud to provide good jobs for people in Kapuskasing and beyond,” Terry Skiffington, Kap Paper's CEO, said in a government news release.
“Thanks to support from FedNor and the Government of Canada, we will adapt to present-day changes in order to continue growing and supporting a critical industry in the region.”
The funds will be used to “maintain operations, explore new production opportunities, and proceed with business planning, engineering, and development work in the months ahead,” the release said.
Kap Paper annually produces 220,000 tonnes of newsprint and bulk paper using virgin pine and spruce fibre from Canadian forests.
The Kapuskasing facility processes wood residue, such as chips and bark, generated at sawmills throughout northeastern Ontario, supporting an estimated 2,500 direct and indirect jobs through the region.
It's the last mill in northeastern Ontario to process chips and biomass, following the closure of Domtar's Espanola mill in 2023.
Earlier this fall, the company warned that, without government assistance, the paper mill was in danger of closing, interrupting Canada's housing supply chain and putting 300 people out of work.
The company called on the federal government to match provincial funding for a planned cogeneration plant along with a power purchase agreement.
Since then, Kap Power has received an outpouring of support, from municipal groups including the Federation of Northern Ontario Municipalities (FONOM) and the Northwestern Ontario Municipal Association (NOMA), along with the general public.
Hundreds gathered in Kapuskasing in early October to rally for the plant's preservation.
There was some relief earlier this month when the federal and provincial governments jointly announced $28.8 million — $16.8 million from the province and $12 million from the feds — for the mill over the short term.
The company said the funds would give it time to find ways to modernize the plant and diversify its product offerings.
Today's funding helps Kap Paper bring some stability to workers and the industry, said Pauline Rochefort, the member of parliament for Nipissing – Timiskaming, in the release.
“This $10-million investment means Kap Paper can resume operations, hundreds of local jobs have been restored, and thousands of indirect jobs saved,” Rochefort said in the release.
“The Kapuskasing mill is not only a major employer, but an economic driving force in the region. Families, communities, and businesses in the area depend on the success of Kap Paper, and I am proud that FedNor has stepped up to restore economic stability in the region.”