Domtar will indefinitely idle its Howe Sound pulp mill and Bayview Fibre chipping facility in Port Mellon, British Columbia, removing approximately 380,000 metric tonnes of annual northern bleached softwood kraft (NBSK) pulp capacity from the market.

The decision will affect approximately 400 employees and represents another significant reduction in British Columbia’s pulp manufacturing base.

Domtar attributes the decision to a combination of weaker Asian demand, persistently poor global pulp pricing and declining availability of affordable domestic fibre.

Although the company describes the move as an indefinite idling rather than a permanent closure, it says any future opportunity to restart the operations will depend on market conditions, fibre availability and the broader business environment.

380,000 Tonnes of NBSK Supply to Leave the Market

The Howe Sound mill produces NBSK, a long-fibre market pulp commonly used where manufacturers require strength characteristics in paper and other fibre-based products.

Idling the facility will remove approximately 380,000 tonnes of annual production capacity.

That makes the announcement relevant beyond the Sunshine Coast.

Market pulp is internationally traded, and changes in capacity can influence regional supply balances, producer operating rates and trade flows.

However, removing capacity does not automatically translate into an equivalent tightening of the pulp market.

The ultimate market impact will depend on several factors, including global demand, inventories, operating rates at competing mills and whether other producers increase production.

Domtar’s explanation for the idling suggests that current supply-demand conditions have made continued operation difficult despite the scale of the facility’s production.

Weak Asian Demand Adds Pressure

Asia represents an important destination for global market pulp, making changes in regional demand particularly important for North American producers.

Domtar specifically identified reduced demand from Asia as one of the factors behind its decision.

The company also pointed to what it described as unprecedented and sustained weak global pulp pricing.

Together, these conditions create pressure from the revenue side of mill economics.

A pulp producer can attempt to improve productivity and reduce operating costs, but prolonged weak selling prices can make high-cost capacity increasingly difficult to justify.

For British Columbia producers, this challenge is compounded by another structural problem: fibre.

Affordable Fibre Remains a Major BC Pulp Mill Problem

Domtar cited the decline in affordable domestic fibre as another reason for the idling.

Pulp mills depend heavily on residual fibre generated by sawmills, including wood chips produced during lumber manufacturing, as well as other suitable fibre sources.

This creates a close relationship between the economics of lumber production and pulp manufacturing.

When sawmills reduce operating rates or close, fewer residual chips can become available to pulp producers. Mills may then need to compete more aggressively for fibre or obtain material from alternative sources.

Transportation distance also matters because moving relatively low-value fibre over longer distances can increase delivered costs.

Bayview Fibre forms part of this fibre-supply system.

Domtar constructed the chipping facility to process fibre supporting its operations, but the company says current conditions remain insufficient to overcome the wider economic challenges facing the business.

Nearly CAD$500 Million Invested Since 2010

The decision comes despite substantial investment in the operation.

According to Domtar, approximately CAD$500 million has been invested since the Howe Sound mill was purchased in 2010, alongside the construction of the Bayview Fibre facility.

The scale of that investment highlights an important point about the pressures facing some established pulp assets.

Capital investment and operational improvements can strengthen mill performance, but they cannot necessarily compensate indefinitely for an unfavorable combination of fibre costs, selling prices and market demand.

“Despite capital investment of nearly CAD$500 million since the mill was purchased in 2010, and the construction of the Bayview Fibre facility, the business cannot overcome reduced demand from Asia, unprecedented and sustained poor pricing for pulp globally, and a decline in affordable domestic fiber,” said Luc Thériault, Domtar’s President – Canada and CEO, Pulp and Wood Products.

About 400 Employees Affected

Approximately 400 employees will be affected across the Howe Sound and Bayview Fibre operations.

The economic consequences are also likely to extend into the surrounding Sunshine Coast and coastal forest sector through contractors, transportation providers and companies involved in the fibre supply chain.

Domtar said employee safety and well-being will be its primary focus during the idling process.

The company also emphasized that the decision was based on business conditions rather than employee performance.

“The teams at Howe Sound and Bayview Fibre worked tirelessly to improve performance but current market conditions require this step,” Thériault said.

Another Warning Sign for British Columbia’s Pulp Sector

The Howe Sound announcement illustrates the interconnected pressures confronting pulp manufacturing in British Columbia.

Global pulp pricing is one component.

Demand from export markets is another.

But the availability and delivered cost of fibre can ultimately determine whether an individual mill remains competitive.

This creates a difficult cycle for forest-industry regions.

Reduced sawmill activity can decrease the supply of residual chips available to pulp mills. Reduced pulp production can then affect demand for lower-quality fibre and residues elsewhere in the forestry system.

The result is that the viability of individual facilities cannot always be assessed independently from the broader regional forest-products network.

For Howe Sound, the immediate outcome is clear: approximately 380,000 tonnes of annual NBSK capacity will be taken offline and around 400 employees will be affected.

What remains uncertain is whether the idling will eventually be reversed.

Domtar says it will continue monitoring pulp markets, domestic fibre availability and the overall business environment before evaluating future opportunities.

That leaves Howe Sound technically in a different category from a permanently closed mill.

But after nearly CAD$500 million of investment, the decision to idle the operation indefinitely demonstrates the severity of the economic pressures currently facing this part of Canada’s pulp industry.

Last Updated on 25/08/2026 by Jota Machinery