The Government of Ontario is providing more than C$2.4 million to support engineering and planning for boiler and chemical-plant upgrades at Thunder Bay Pulp and Paper, as the mill advances its transition to a pulp- and energy-focused operation following the closure of its newsprint business earlier this year.

The funding, announced through Ontario’s Forest Biomass Program, is intended to help define projects that could increase the mill’s daily kraft pulp production by about 11%, reduce bleaching chemical consumption by roughly 30%, and cut annual natural gas use by more than 5 million cubic metres — an energy saving the province equates to heating around 2,000 Northern Ontario homes for a year.

The productivity gains are expected to create demand for more than 130,000 tonnes of forest biomass annually, supporting additional harvesting, hauling and trucking activity across Northwestern Ontario. Together with two other forestry projects announced on September 17, the investments are projected to protect more than 700 direct jobs and approximately 3,350 indirect jobs in the region’s forest supply chain.

“Thunder Bay Pulp and Paper is evaluating several strategic projects that are focused on lowering manufacturing costs and increasing productivity,” said Norm Bush, CEO of Thunder Bay Pulp and Paper. Bush said the funding will support the engineering work needed to define the projects and verify their technical and economic feasibility.

Bush said the three projects under consideration include measures to lower bleaching costs and emissions, reduce energy consumption and increase pulp production. The combined capital cost of the major projects could total approximately C$170–180 million, although the current provincial funding is for the engineering work required before the company decides whether to proceed.

Shift toward softwood kraft pulp

The planned investment comes as Thunder Bay Pulp and Paper completes a significant change in its product mix.

In January 2026, the company announced it would discontinue newsprint production during the first quarter of 2026, citing a sharp and continuing decline in North American newsprint demand and higher input costs.

According to the company, North American newsprint demand had fallen 40% since 2022, when Atlas Holdings acquired the mill. Up to 150 employees were directly affected by the closure of the newsprint operation.

The company said it would continue operating as a single-line softwood kraft pulp mill while generating renewable energy for sale to the grid. It also said it would work with federal and provincial governments on new investments in the softwood kraft pulp operation.

The mill markets its pulp to a range of customers and applications. Bush told local media that these include products such as paper towels and toilet paper, as well as copy and specialty printing papers.

Fastmarkets reported that Thunder Bay Pulp and Paper is exiting the northern bleached hardwood kraft (NBHK) market in 2026 and becoming an NBSK-focused market pulp producer. Its Mill Asset Database lists capacity at 330,000 tonnes per year, while an industry source estimated production of approximately 300,000–310,000 tonnes of exclusively NBSK market pulp in 2026.

Thunder Bay Pulp and Paper describes itself as a producer of northern bleached softwood kraft and energy. The mill has operated in Northwestern Ontario for more than a century and historically produced a range of pulp and paper products, including hardwood kraft pulp and newsprint.

Atlas Holdings ownership

Atlas Holdings established Thunder Bay Pulp and Paper Inc. as an independent operating entity after acquiring the Thunder Bay mill from Resolute Forest Products.

The transaction followed Paper Excellence’s acquisition of Resolute through Domtar in 2023. As part of the regulatory approval, the Thunder Bay and Dryden mills were required to be sold to independent purchasers because of competition concerns related to northern bleached softwood kraft pulp and wood-fibre procurement in Northwestern Ontario.

Resolute entered into an agreement in May 2023 to sell the Thunder Bay mill to an affiliate of Atlas Holdings for C$219 million in cash, subject to customary adjustments. The transaction closed on August 1, 2023.

Previous investment in the mill

The latest funding follows an earlier C$5 million investment from Ontario announced in 2024 under the Forest Biomass Program.

That project supported upgrades and improvements to the mill’s electrical system, with the aim of enabling future measures to increase green-energy production, reduce emissions and increase the use of forest biomass.

A further C$87,750 announced in July 2025 supported two studies assessing current technology and designing upgrades to the mill’s boiler, fibre-recovery and sludge-processing systems. The studies were intended to support the facility’s modernization.

The earlier studies provide a direct link to the current modernization program, which now includes planned boiler and chemical-plant upgrades.

Growing role in the forest bioeconomy

The Thunder Bay site is also becoming a location for projects beyond conventional pulp production.

In 2026, Ontario announced C$5.5 million in funding for Greenwater Technology to develop a commercial-scale demonstration facility at the Thunder Bay Pulp and Paper site. The project, with a reported total cost of approximately C$15.5 million, involves converting a former building at the mill into a demonstration facility for technology aimed at producing renewable diesel and sustainable aviation fuel from underused wood and mill by-products.

Greenwater expects the facility to process approximately 10 tonnes of dry biomass per day and is targeting a yield of around 300 litres of fuel per tonne of wood. Construction was expected to be completed by the end of September 2026, followed by extended operational testing.

“Thunder Bay is the perfect location to build this demonstration facility,” Greenwater president James Irving said, citing the area's research, engineering, fabrication and forestry resources.

The mill is also participating in research into another potential use for its by-products.

In July 2026, Ontario awarded C$262,500 to Rock Tech Lithium through its Critical Minerals Innovation Fund for a project with Thunder Bay Pulp and Paper and Queen’s University to evaluate crude tall oil, a by-product of pulp production, as a potential flotation reagent for lithium processing.

The project is intended to investigate whether a locally sourced pulp-mill by-product could provide a new application for crude tall oil while connecting Ontario’s forestry and critical-minerals sectors.

The collaboration was subsequently recognized with a 2026 Northern Innovators Award for cross-sector collaboration between the forestry and critical-minerals industries.

A renewed focus on pulp and energy

The latest investment comes as Thunder Bay Pulp and Paper transitions away from its former integrated pulp-and-paper model.

With newsprint production discontinued, the mill is now focused on softwood kraft pulp, while continuing to generate renewable energy. The planned boiler and chemical-plant projects are intended to raise pulp production, reduce chemical and natural-gas consumption and increase demand for forest biomass.

The projects also build on several years of investment and development at the site, including electrical modernization, studies into mill-efficiency improvements, renewable-fuel development and potential new applications for pulp-mill by-products.

For Thunder Bay Pulp and Paper, the latest funding represents another step in repositioning the mill around softwood kraft pulp, energy and broader forest-biomass opportunities following the end of its newsprint operations.