CHAPLEAU — REGIONAL NEWS — Ontario is investing more than $17.3 million in four Northern Ontario forestry projects aimed at modernizing mills, increasing the use of forest biomass and improving productivity as the sector faces continuing pressure from U.S. tariffs and changing global markets.
The province says the projects are expected to create six jobs, protect more than 320 existing positions and support more than 600 indirect jobs connected to harvesting, transportation, mill operations and supply chains.
The investments are being made through Ontario’s Forest Sector Investment and Innovation Program and Forest Biomass Program.
Funding Targets Mills, Biomass and Energy Systems
The largest single investment is going to Interfor, which will receive more than $9.6 million to modernize its Elk Lake sawmill.
The project includes a biomass-powered energy system the province says will increase production by 27 per cent, reduce natural gas use by 80 per cent and lower annual operating costs by nearly $3 million.
GreenFirst Forest Products will receive more than $5.9 million for a new production line designed to improve productivity by 24 per cent at its Chapleau operation.
The company will also receive more than $1.6 million to study the feasibility of a biofuel facility.
“This is an investment in the people of Chapleau. Modernizing the sawline and planer secures the mill’s competitiveness for the long run, and the biofuel feasibility work could bring a whole new industry to the region—up to 30 direct jobs from wood fibre that today has limited markets. We’re proud to build that future with the province,” said Joël Fournier CEO, GreenFirst Forest Products.
Ontario says the biofuel concept could eventually create as many as 30 direct and 70 indirect jobs if it moves ahead.
Atlantic Power is receiving more than $180,000 to upgrade the control system at the Calstock Power Plant near Hearst.
That facility converts biomass into electricity and provides a market for mill byproducts and other forest residue.
“Calstock has been converting biomass into electricity for this region since 2000, and modernizing the steam turbine control system is what keeps that going for years more. This investment upgrades critical control equipment, sustains the strong availability record the plant has built, and protects a reliable outlet for the biomass and mill by-products generated across the Hearst area,” states Dominic Lemieux General Manager, Ontario Operations, Atlantic Power.
Biomass Becoming More Important to Forestry Economics
Ontario says the four projects could create additional annual demand for more than 500,000 tonnes of forest biomass.
Forest biomass can include bark, sawdust, branches, low-value wood and other material that may have limited commercial use in traditional lumber production.
Creating markets for that material can improve the economics of forestry operations by allowing companies to generate value from more of each harvested tree.
It can also provide fuel for heat, electricity or biofuel production.
For Northern Ontario, the biomass question is increasingly tied to mill viability.
When sawmills, pulp operations and biomass facilities operate together, byproducts from one operation can become inputs for another. That can strengthen local supply chains and reduce waste.
The model is especially important in communities where a single major forestry employer can represent a significant share of the local economy.
Chapleau Investment Focuses on Long-Term Mill Competitiveness
GreenFirst CEO Joël Fournier said the Chapleau investments are intended to strengthen the sawmill while examining opportunities to create additional value from wood fibre that currently has limited markets.
Chapleau Mayor Ryan Bignucolo said the mill remains an important local employer whose economic impact extends to workers, contractors and other businesses in the community.
The province is positioning the investment as part of a wider effort to protect forestry employment while Canadian producers face increased uncertainty in the U.S. market.
For Northern Ontario mills, competitiveness can depend heavily on energy costs, transportation expenses, productivity and the ability to sell lower-value wood and mill residues.
Modernization projects can therefore be important even when they do not involve major increases in employment.
In many forestry communities, protecting existing jobs can be as economically significant as creating new ones.
Elk Lake Project Aims to Cut Natural Gas Use
The Interfor project in Elk Lake has a strong energy component.
The planned biomass system is expected to replace much of the mill’s natural gas consumption.
If the projected 80-per-cent reduction is achieved, the project could reduce the mill’s exposure to fossil-fuel price volatility while creating additional demand for forestry residues.
Interfor vice-president Stuart Card said the operation supports not only mill employees but harvesting contractors, transportation firms, suppliers and surrounding communities.
That broader economic footprint is important across Northern Ontario, where forestry jobs frequently support several additional jobs outside the mill gate.
Calstock Upgrade Supports Hearst-Area Biomass Market
Atlantic Power’s Calstock facility has been converting forest biomass into electricity since 2000.
The provincial funding will help modernize the plant’s steam-turbine control system.
Atlantic Power says the upgrade is intended to maintain plant reliability and preserve a market for biomass and mill byproducts produced across the Hearst area.
That local market can be important to forestry companies because transportation costs can make low-value biomass uneconomic if it has to be hauled long distances.
A nearby energy user can therefore improve the economics of harvesting and mill operations while supporting electricity production.
U.S. Tariffs Add Pressure to Ontario Forestry
The investments come as Ontario’s forestry industry faces renewed trade uncertainty with the United States.
The province says its broader forestry strategy is partly aimed at reducing vulnerability to U.S. tariff action by improving productivity, developing new markets and encouraging greater use of biomass.
Northern Ontario is particularly exposed to changes in the forestry market because many communities depend heavily on sawmills, harvesting, trucking and related services.
U.S. trade measures can affect prices and margins, but forestry companies also face other challenges, including energy costs, transportation distances, aging equipment and changing demand for traditional forest products.
Diversifying into biomass, engineered wood products and other uses for fibre could become increasingly important.
Forestry Remains a Major Ontario Industry
Ontario says its forest sector generates close to $21 billion in annual business revenue and supports close to 155,000 direct and indirect jobs.
Since 2023, the Forest Biomass Program has committed more than $83 million to 71 projects, according to the province.
Ontario says those projects have attracted more than $276 million in additional investment and created more than 115 new jobs.
The Forest Sector Investment and Innovation Program has approved close to $90 million in provincial funding, which Ontario says has helped secure an additional $420 million in outside investment.
Those figures are provincial estimates and should be viewed in the context of a forestry industry that continues to face considerable market and trade uncertainty.
What This Means for Northwestern Ontario
Although the announced projects are centred in northeastern communities including Chapleau, Elk Lake and Hearst, the policy direction has relevance across Northwestern Ontario.
Communities including Thunder Bay, Atikokan, Ignace, Dryden, Ear Falls, Fort Frances, Kenora and surrounding First Nations have long-standing economic ties to forestry.
The push toward biomass and more integrated fibre use raises several questions for the Northwest:
Can additional biomass energy projects be developed?
Can more mill residue be turned into higher-value products?
Can local energy projects strengthen sawmill economics?
And can new markets reduce dependence on traditional lumber exports to the United States?
Those questions are becoming more important as Northern Ontario looks for ways to preserve forestry employment while adapting to changing trade, energy and environmental conditions.
The province’s new investments suggest biomass will play a larger role in that strategy.
