By Sandi Krasowski | The Chronicle-Journal
The Canadian government will spend $7.5 million to support Kap Paper Inc. with a front end engineering design (FEED) study for a new facility in Kapuskasing, Ont.
The money, which is delivered through the Strategic Response Fund, is in addition to the government’s $10-million grant in October of 2025, which helped keep Kap Paper running.
Collaboration between the Ontario and Canadian governments last fall resulted in the agreement to provide operational support to Kap Paper, as the mill worked towards a long-term modernization plan.
Terry Skiffington, Kap Paper president and chief executive officer, told The Chronicle-Journal that Kap Paper is now able to advance the technical and commercial analysis required to assess a potential pivot toward higher-value wood fibre products that are aligned with global markets.
He said the proposed facility would strengthen Kap Paper’s established role as an integrated partner to the regional forestry sector. It would also position the company to compete in growth markets that value engineered wood products and advanced manufacturing.
“This support allows us to do the rigorous planning work needed to make a responsible, long-term investment decision,” Skiffington said. “The FEED study is a critical step toward diversifying our product offerings, strengthening demand for regional fibre, and ensuring the Kapuskasing mill continues to be a cornerstone employer in Northeast Ontario.”
He added that Kap Paper recognizes the collaborative efforts of Northern Ontario’s municipal leaders, whose continued advocacy keeps the region’s voice heard. The company also thanked its union partners for their dedication to the community, commitment to worker safety, and continued professionalism during this time of transition.
Patty Hajdu, minister of jobs and families and minister responsible for the Federal Economic Development Agency for Northern Ontario (FedNor), said the government has been actively supporting struggling paper mills that have produced pulp for the newspaper industry.
“This isn’t really tariff-related economic decline, but this is about pivoting to new products,” she said.
“That includes Kap Paper and Green First also in the Timmins-Cochrane area, because we do believe we need a strong ecosystem of being able to produce the raw materials into the products that will be needed now and into the future.”
She added, “We’re in it for the long haul with Northern Ontario, whether it’s support for companies that they pivot, support for workers as they retrain, or support for people as they deal with challenging economic situations.”
