Two municipal associations in Northern Ontario are warning that the closure of a key paper facility in Kapuskasing could trigger a chain reaction of sawmill shutdowns, putting Canada's national housing strategy at risk.
The Federation of Northern Ontario Municipalities (FONOM) and the Northwestern Ontario Municipal Association (NOMA) are calling on the federal government to act to prevent what they describe as a looming crisis.
“The Kapuskasing Paper facility is the linchpin in an integrated system that keeps sawmills across the region operating,” said Danny Whalen, President of FONOM, in a joint media release. “If Ottawa doesn’t step in now, those sawmills will close, jobs will vanish, and the very foundation of the housing plan will crumble."
According to the release, the mill is set to close within two weeks. Without it, smaller operations in Hearst, Chapleau, Cochrane, and surrounding areas could be forced to shut down as well, officials say. The facility processes chips and bark, byproducts from sawmills, giving them a vital market.
“At the heart of Canada’s housing plan is wood, and that wood comes from Northern Ontario,” Whalen said.
The organizations say this isn’t just about one mill, it’s about an entire national supply chain that supports the federal Build Canada Homes initiative, which aims to double housing construction across the country.
“This is bigger than one mill—it’s about safeguarding a national supply chain,” said Rick Dumas, President of NOMA. “Once this capacity is lost, it cannot be rebuilt quickly—if at all.”
They are urging the federal government to provide direct financial support, address trade barriers with the U.S., and formally recognize Ontario’s forestry sector as a critical part of national housing efforts.
“We are ready to work with the Government of Canada on solutions,” Whalen added. “But the clock is ticking—we are talking about days, not months.”
They say a letter has been sent to federal officials.