I remember when the Kapuskasing mill whistle would echo across town, signaling shift changes that kept the local economy beating steadily. Now that familiar sound has new life, thanks to a significant financial boost from both provincial and federal coffers.
The Ontario government recently announced $6 million in financial support for the Kapuskasing paper mill, complementing federal backing that together creates a substantial lifeline for the operation. For a northern community where paper production has been the economic backbone for generations, this represents more than just dollars and cents.
“This investment secures jobs and stability in a region where every manufacturing position supports approximately five additional jobs throughout the community,” explains Raymond Ferris, CEO of GreenFirst Forest Products, which operates the facility. “When mills close in single-industry towns, the ripple effects can devastate entire communities.”
The funding package addresses several critical needs: modernization of equipment, energy efficiency improvements, and adaptation to changing market demands that have battered traditional paper producers across North America. The mill employs approximately 375 workers directly, with hundreds more dependent on the supply chain it creates.
Minister of Northern Development Greg Rickford highlighted the strategic importance of the investment during the announcement ceremony. “Forest products remain a cornerstone industry for northern Ontario’s economy,” Rickford noted. “These funds ensure Kapuskasing’s mill can compete globally while supporting sustainable forestry practices.”
The announcement comes as welcome news following years of uncertainty in Canada’s paper industry. Since 2005, over 60 pulp and paper facilities have closed nationwide, according to Natural Resources Canada data, eliminating tens of thousands of jobs as digital communication reduced demand for traditional paper products.
What makes the Kapuskasing situation different is the mill’s pivot toward specialty papers and packaging products—sectors showing resilience even as newsprint and office paper markets contract. This adaptability factored heavily into government decisions to provide support.
Municipal leaders express cautious optimism about what the funding means for the community’s future. Mayor Dave Plourde emphasized the generational significance of maintaining the operation. “Many families in Kap have three generations who’ve worked at the mill,” Plourde said. “This funding helps ensure we don’t become another statistic in the list of former paper towns.”
The federal portion of funding comes through FedNor, the Federal Economic Development Agency for Northern Ontario, which committed $7.9 million toward operational improvements. MP Terry Sheehan framed the investment as supporting both economic and environmental goals. “Modern forestry operations like this one demonstrate how resource industries can evolve to meet 21st-century standards for sustainability,” Sheehan stated.
Not everyone views government intervention in private industry with enthusiasm, however. Some economic analysts question whether public funds should prop up sectors facing structural decline. The Canadian Taxpayers Federation has consistently criticized direct industry subsidies, arguing they delay inevitable market corrections.
Christine Van Geyn, Ontario Director for the Canadian Taxpayers Federation, raised concerns about the approach: “While we all want northern communities to thrive, direct subsidies often postpone necessary transitions rather than facilitate them. The question is whether this funding creates genuine sustainability or merely delays difficult decisions.”
Industry experts counter that temporary support during transition periods makes economic sense. Forestry economist Don Roberts of CIBC World Markets points to successful transformations in Finland and Sweden, where traditional paper producers pivoted toward innovative bio-products with government backing during critical transition phases.
“The key distinction is whether funding supports transformation versus simple preservation,” Roberts explains. “Investments that help facilities evolve toward growing market segments often pay dividends through continued employment and eventual self-sufficiency.”
For workers at the Kapuskasing mill, theoretical debates about industrial policy take a back seat to practical realities. Frank Dottori, a veteran of the Canadian forest industry who previously led efforts to save several northern Ontario mills, notes that timing matters tremendously.
“Without this kind of bridge support, facilities often shut down before they can complete necessary transitions,” Dottori observes. “Once equipment is scrapped and workers disperse, reopening becomes nearly impossible, regardless of market conditions.”
The funding package includes provisions requiring GreenFirst to meet specific environmental and operational benchmarks, including reduced carbon emissions and implementation of advanced manufacturing processes. These conditions aim to ensure public money generates lasting improvements rather than temporary relief.
For Kapuskasing—population 8,000—the mill’s continued operation means young people can still envision futures in their hometown. Local business owner Marie Leblanc, whose family-run hardware store has served mill workers for decades, sees the announcement as breathing room for the entire community.
“When people have stable jobs, they renovate homes, buy snowmobiles, eat at restaurants,” Leblanc says. “Without the mill, we’d see a domino effect of closures across town.”
As government funding flows into the operation, the true test will be whether this investment marks the beginning of sustainable transformation or merely delays inevitable decline. For now, the mill whistle continues to sound, and Kapuskasing residents hope it will echo through the northern Ontario forest for generations to come.
