Ontario is providing Thunder Bay Pulp and Paper with just over C$2.4 million.

But the investment being studied behind that grant could be roughly 70 times larger.

Thunder Bay Pulp and Paper CEO Norm Bush says three proposed projects at the Northwestern Ontario mill could together cost approximately C$170 million to C$180 million if the company decides to proceed.

For now, the provincial funding is paying for the engineering work needed to define those projects and determine whether the economics justify the larger capital commitment.

That changes the significance of the announcement.

This is not yet a C$180 million mill modernization. It is the engineering stage that will determine whether one happens.

Three projects attack three different mill costs

Bush says the programme is effectively divided into three areas.

One project targets the bleaching operation, reducing chemical consumption and associated costs.

A second focuses on energy efficiency.

The third would increase pulp production.

Ontario says the proposed upgrades could ultimately increase daily kraft pulp output by 11%, while reducing bleaching-chemical use by approximately 30% and annual natural-gas consumption by more than 5 million cubic metres.

That combination is important.

The business case is not simply:

spend capital to make more pulp.

It is closer to:

make more pulp while lowering the amount of chemicals and fossil energy required by the process.

For an established kraft mill, that can be a much stronger investment case.

The C$170–180 million figure puts the grant in perspective

Government funding represents only a small fraction of the potential project value.

If the eventual capital requirement reaches C$180 million, the current C$2.4 million contribution would represent little more than 1% of that amount.

Its role is therefore less about financing construction and more about reducing the risk of getting to an investment decision.

Engineering studies need to establish:

how much equipment must change,

what the actual production bottlenecks are,

how much energy can realistically be saved,

whether the projected chemical reduction can be achieved,

and what return the completed projects could generate.

Bush described the work as necessary to “verify and validate” whether the projects are economically sound before the mill proceeds.

That is the stage where many brownfield projects either become real investments or disappear.

Another 130,000 tonnes of biomass would extend the impact outside the mill

Higher pulp production would also increase demand for fibre and biomass.

Ontario estimates the projects could create a market for more than 130,000 tonnes of forest biomass annually, supporting harvesting, hauling and trucking across Northwestern Ontario.

This is why the province describes Thunder Bay Pulp and Paper as an anchor operation for the regional forest economy.

The government says the wider projects supported by this funding are associated with more than 700 direct jobs and 3,350 indirect jobs, including employment connected to sawmills, forestry operations and transportation. These are government estimates of jobs supported or protected, not newly created positions.

For regional sawmills, a stronger pulp mill can also provide an important outlet for wood chips and other fibre streams that are not sold as lumber.

The proposed energy saving is economically significant

A reduction of more than 5 million cubic metres of natural gas per year is not simply an emissions metric.

It is a recurring operating-cost reduction.

Ontario compares that volume with the annual heating requirement of roughly 2,000 Northern Ontario homes.

For the mill, the more relevant issue is what those avoided gas purchases mean over the operating life of the upgraded boiler system.

The same applies to bleaching chemicals.

A 30% reduction does not produce a one-time saving.

If achieved, it changes the variable cost of every tonne of pulp produced.

That is what makes the proposed projects potentially more attractive than a straightforward capacity expansion.

Higher output would be accompanied by lower input intensity in parts of the process.

But none of those savings has been achieved yet

This distinction is important.

The mill has not yet increased kraft output by 11%.

It has not yet cut bleaching chemicals by 30%.

And it has not yet eliminated 5 million cubic metres of annual natural-gas consumption.

Those are projected outcomes being evaluated through the engineering programme.

The next meaningful milestone will therefore not be another funding announcement.

It will be whether Thunder Bay Pulp and Paper completes the engineering work and commits to the much larger capital programme.

If it does, the C$2.4 million announced this month could eventually be remembered as the relatively small planning investment that helped unlock a C$170–180 million modernization.

And that would make this a much more consequential project for Northwestern Ontario’s pulp and forest-products economy than the original grant figure suggests.

Last Updated on 21/09/2026 by Jota Machinery