Ontario Paper Mill Faces Closure Amid Federal Funding Dispute
A northern Ontario paper mill, Kap Paper in Kapuskasing, is at risk of closure after citing a lack of immediate federal support despite receiving loans from the province. The situation has sparked a debate between the federal and provincial governments regarding financial responsibility for the mill, which directly employs approximately 420 people and supports an estimated 2,500 indirect jobs in the region.
Federal and Provincial Stance
Industry Minister Mélanie Joly stated that Ottawa remains committed to offering financial support to prevent job losses at the struggling mill. Her office emphasized that they have "come to the table" with federal supports and are urging the provincial government to "remain in lockstep" to reach a rescue package. The federal government claims to have advised Kap Paper to formally apply to its Strategic Innovation Fund and other targeted employment supports.
However, the Ontario government maintains that it has already provided Kap Paper with $50 million in loans to cover operating expenses and expressed disappointment that the federal government did not join in providing immediate support. Ontario Natural Resources Minister Mike Harris and Associate Forestry Minister Kevin Holland jointly stated that the province has "continuously pushed the federal government to come to the table as an equal partner, standing up for Canadian forestry jobs and treating Ontario forestry workers fairly."
Mill Operations and Impact
Kap Paper has operated in Kapuskasing for over a century. The company announced it was suspending operations after failing to secure short-term federal support. The company stated that the Ontario government urged it to seek long-term funding from Ottawa, but the timing of the suggested support did not align with its need for an immediate solution to keep the mill operational.
The potential closure of Kap Paper could have significant economic consequences for the Kapuskasing community, impacting not only the 420 direct employees but also 2,500 indirect jobs at sawmills, transport companies, and other related operations. Mayors from the region and the local MPP are scheduled to hold a news conference to address the situation.
Moving Forward
Despite the current impasse, Minister Joly's office maintains that they "will keep working with the company on options to resume operations." The statement expresses concern for the affected workers and the community, stating that "the workers at Kap Paper and the people of Kapuskasing deserve nothing less." The situation remains fluid, with both the federal and provincial governments publicly stating their commitment to finding a solution.
