The impending closure of Kap Paper will not only impact jobs and communities in northeastern Ontario, but will disrupt the flow of wood in an already struggling industry, said the Federation of Northern Ontario Municipalities (FONOM).
In a statement, FONOM president Danny Whalen called the Kapuskasing paper company’s Sept. 29 announcement a “devastating moment” for the northeast.
“The Kap Paper mill is an anchor for our region’s economy. Without urgent and coordinated intervention from both levels of government, we risk losing hundreds of jobs, destabilizing communities, and undermining Ontario’s forestry sector,” Whalen said.
The impacts of the closure would ripple far beyond Kapuskasing, affecting families, workers, Indigenous partners, suppliers, and communities across the North, the group said. FONOM leaders are urging Ottawa and Queen’s Park to work together to deliver emergency relief for the company, which employs 300.
FONOM said $50 million in government loans have helped prop up the 2,500–employee forestry sector but without federal aid coming, the industry in northeastern Ontario faces collapse. That’s an industry, the group said, that contributes more than $300 million annually to governments and suppliers, including $74 million directly to Ontario.
Mills in Hearst and elsewhere depend on Kap Paper to receive and process wood residue as part of their integrated supply chains.
Municipal tax bases and regional businesses will suffer, FONOM said, but so too will the Ontario Northland Transportation Commission. The group said about four per cent of the Crown agency’s revenue, depends on Kap Paper and its partner sawmills.
The closure of the mill, said Mushkegowuk-James Bay MPP Guy Bourgouin, will not only dismantle a main economic driver in Kapuskasing, but impacts the economies in nearby Hearst, Cochrane, Mattice, Opasatika, Val Rita-Harty, Moonbeam, Fauquier and many First Nation communities.
“The north cannot lose another cornerstone employer," said Bourgouin in a Facebook-posted message directed at Premier Doug Ford.
Bourgouin claims Ottawa is committed to engaging in discussions to save Kap Paper, yet the province hasn't publicly shown a willingness to engage in these talks. He urged the province to move “without delay” to deliver a more coordinated approach.
Municipal leaders in northwestern Ontario are calling on the federal and provincial government to take swift action to safeguard Kap Paper's future and ensure the stability of the forestry sector.
The Northwestern Ontario Municipal Association (NOMA) said Kap Paper’s decision to wind down operations is evidence there are no short-term fixes despite years of government talks about the mill’s future.
“This is a heartbreaking moment for Northern Ontario,” said NOMA president and Marathon mayor Rick Dumas in a statement.
“Thousands of workers, families, and businesses depend on Kap Paper. We are urging the Prime Minister and the Premier to work together now—without delay—to deliver emergency support, keep the mill operating, and protect the integrated forestry supply chain that sustains our communities.”