Peace River pulp mill gets $20M federal support to weather Trump tariffs

A pulp mill that has operated in northwestern Alberta for more than three decades is receiving $20 million in federal modernization funding to help withstand pressure from American tariffs.

Mercer Peace River Pulp Ltd., located about 150 kilometres northeast of Grande Prairie near the town of Peace River, announced the funding Wednesday, Aug. 27, through Ottawa's Regional Tariff Response Initiative. The investment will support facility upgrades and equipment improvements to increase operational efficiency and shift production toward a more profitable mix of hardwood and softwood pulp.

The mill, operating since 1990, employs approximately 360 people in the region. Peace River Mayor Shelly Shannon said the funding came as a relief to residents after recent mill closures across Canada raised concerns the operation could face the same fate. "People were very worried," she said. "Many young families are dependent on it for their livelihood. The community is dependent on it."

Canada's forestry sector faces severe headwinds from the United States' new 50 per cent tariffs on Canadian goods. Dozens of pulp and forestry product mills have shuttered across Canada in recent years. In Alberta alone, the Canfor Sawmill in Fox Creek will be fully closed by the end of September, affecting around 70 jobs. The West Fraser Oriented Strand Board Mill in High Level curtailed operations in late April, costing the community 190 jobs.

The federal funding will be used for capital improvements including upgrades to the mill's process-piping, pulp machine, recovery boiler, and lime kiln. The money will also position the facility for a planned expansion of bio-energy production and carbon capture and storage operations, federal officials said.