The Government of Canada is investing $10 million to support Kap Paper and protect over 2000 jobs across Northeastern Ontario

From: Federal Economic Development Agency for Northern Ontario - FedNor

News release

FedNor funds will help the business adapt and respond to shifting market conditions in the forestry industry of Northern Ontario

October 31, 2025 – Kapuskasing, ON – Federal Economic Development Agency for Northern Ontario

For generations, the forestry industry has been the backbone of Northern Ontario, driving opportunity and growth in our communities. Today, as global trade shifts and new challenges emerge, we’re supporting these industries to thrive.

Today, Pauline Rochefort, Parliamentary Secretary to the Secretary of State (Rural Development) announced the delivery of $10 million in conditionally-repayable FedNor funds to support the continued and future operations of Kap Paper. The announcement was made on behalf the Honourable Patty Hajdu, Minister of Jobs and Families and Minister responsible for FedNor.

FedNor will provide $10 million in Northern Ontario Development Program funding to Kap Paper to support targeted, eligible operating expenses. This funding will help the company maintain operations, explore new production opportunities, and proceed with business planning, engineering, and development work in the months ahead.

This support addresses critical business needs, reinforces the regional forestry industry, and helps sustain over 2,000 jobs in Kapuskasing and surrounding communities.

This FedNor support is part of the Government of Canada’s ongoing commitment to support local industries across the country with trade resilience measures, through initiatives such as:

  1. The Strategic Response Fund, through which the Government of Canada will invest $5 billion with flexible terms to help firms in all sectors impacted by tariffs adapt, diversify, and grow, with support provided to industries by new Workforce Alliances to align training and workforce needs.
  2. The Regional Tariff Response Initiative, through which the Government of Canada will provide $1 billion over 3 years to support small and medium-sized enterprises (SMEs) impacted by tariffs, strengthening the competitiveness of Canadian businesses by helping them boost productivity, cut costs, build more resilient supply chains, and reach new markets.
  3. The Workforce Alliances and Sectoral Workforce Innovation Fund, through which the Government of Canada will invest $382 million over five years to tackle urgent labour market challenges, bring together government, employers, unions, and industry organizations to develop and implement tailored workforce development strategies, and drive growth.

Economic uncertainty resulting from a rapidly changing global landscape is putting pressure on businesses and workers across Canada. That is why the Government of Canada is acting now, and creating measures to equip the industries of Northern Ontario with the tools needed to remain strong, and to continue building forward.

Quotes

“Canada’s strength comes from workers, and the Government’s support for them will not waver. We’re empowering businesses like Kap Paper with the tools to grow and prosper. This is protecting good jobs and building a stronger future for Northern Ontario,”

-       The Honourable Patty Hajdu, Minister of Jobs and Families and Minister responsible for FedNor, and Member of Parliament for Thunder Bay—Superior North

“This $10M investment means Kap Paper can resume operations, hundreds of local jobs have been restored, and thousands of indirect jobs saved. The Kapuskasing mill is not only a major employer but an economic driving force in the region. Families, communities, and businesses in the area depend on the success of Kap Paper and I am proud that FedNor has stepped up to restore economic stability in the region.”

-       Pauline Rochefort, Parliamentary Secretary to the Secretary of State (Rural Development), and Member of Parliament for Nipissing—Timiskaming

“The Government of Canada is investing in Kap Paper to reinforce Canada’s industrial strength and defend thousands of jobs here in Kapuskasing and across the region. The Northern Ontario caucus is working to future proof our forestry sector by securing investments in domestic production, developing Canadian expertise, and helping companies retool, reinvest, and pivot to a growing Canadian market and those of new, reliable trading partners around the world. Today's announcement will help Northern Ontario achieve exactly that.”

-       Viviane Lapointe, Member of Parliament for Sudbury

“Kap Paper is proud to provide good jobs for people in Kapuskasing and beyond. Thanks to support from FedNor and the Government of Canada, we will adapt to present-day changes in order to continue growing and supporting a critical industry in the region.”

-       Terry Skiffington, CEO, Kap Paper

Quick facts

  • The Strategic Response Fund (SRF) is a $5 billion Government of Canada fund that will help firms in all sectors impacted by tariffs adapt, diversify, and grow.

    • The SRF will concentrate on strategic sectors disproportionately exposed to U.S. tariffs and global trade risks, such as automotives, steel and aluminum. It will also have flexibility to intervene in other high-value sectors where timely federal action is critical to maintaining investment and capacity in Canada.
    • The SRF builds on the mandate of the Strategic Innovation Fund (SIF), maintaining support for industrial innovation while expanding its focus to include responsive, targeted investment to trade-exposed sectors.

  • The Regional Tariff Response Initiative will enable businesses to open doors to new markets, boost productivity, and strengthen domestic supply chains. Visit FedNor’s website to learn more.

  • Delivered through Canada’s regional development agencies, the Regional Tariff Response Initiative is a national initiative that will enable businesses to offset the impacts of tariffs and adapt to longer-term trade volatility by opening doors to new markets, boosting productivity, reducing costs, and strengthening domestic supply chains.

  • The RTRI is part of a broad set of tariff support measures, including the Large Enterprise Tariff Loan Facility, the Business Development Bank of Canada’s Pivot to Grow initiative, and support for trade-exposed sectors through the Strategic Response Fund.

  • In Northern Ontario, FedNor is working closely with federal, provincial, and territorial partners to respond to the unique needs of the region and build one strong Canadian economy.

Associated links

Contacts

Jennifer Kozelj
Senior Communications Advisor and Press Secretary
Office of the Minister of Jobs and Families and Minister responsible for FedNor
jennifer.kozelj@labour-travail.gc.ca

Federal Economic Development Agency for Northern Ontario
Media Relations

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2025-10-31