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Lifeline for Kapuskasing: $29M Government Bailout Revives Northern Ontario Paper Mill
The paper mill in Kapuskasing, Ont., in 2017, then owned by Tembec. Current operator Kap Paper said last month that it would have to idle operations after failing to obtain emergency government support.
A major paper mill in Kapuskasing, Northern Ontario, is set to restart operations after receiving a combined $29 million in financial support from the federal and provincial governments.
The funding package comes after weeks of uncertainty, during which the mill announced plans to idle operations due to mounting financial pressures. The shutdown had already sent home most of the mill’s 350 employees and threatened the livelihoods of an additional 2,500 forestry workers across the region.
The bailout includes a mix of loans and support measures designed to stabilize the company while it develops a long-term strategy to remain competitive in the global pulp and paper market. Officials say the intervention was necessary to protect jobs and sustain the forestry supply chain that underpins the local economy.
Community leaders in Kapuskasing welcomed the announcement, calling it a critical step in safeguarding one of the town’s largest employers. The mill’s restart is expected to roll out gradually in the coming weeks, bringing workers back on the job and restoring confidence in the region’s forestry sector.
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