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Another sawmill in northwestern Ontario is being shut down indefinitely.
Domtar announced on Tuesday that the Ignace sawmill will be idled once its existing log inventory has been processed, which is expected to be finished by March 12.
“These decisions are driven by challenging market conditions and ongoing economic uncertainty. Lumber demand in North America remains weak, requiring Domtar to align production levels with current market realities,” Guillaume Julien, senior director of public affairs for Domtar, said in an emailed statement on Wednesday.
“In addition, tariffs and broader economic pressures continue to weigh heavily on the forest products sector.”
The news comes after Domtar announced it is temporarily reducing its lumber production by 150 million board feet across its facilities in Quebec, Ontario and the United States for the first quarter of 2026.
About 1,200 people live in Ignace, Ont., located along Highway 17 between Kenora and Thunder Bay. The Ignace sawmill employs about 25 people, but also supports several other indirect jobs, said Wesley Ridler, business representative for United Steel Workers Local 1-2010.
“The community’s saddened by what’s happening,” said Jake Pastore, communications and outreach lead for the Township of Ignace, on Wednesday.
I don’t think it comes as a complete shock to folks, but nonetheless, when these indefinite shutdowns happen in the community, there’s always significant impact.– Jake Pastore, communications and outreach lead for the Township of Ignace
At the same time, he said, “the community also understands what’s happened with softwood lumber prices, what’s happening with the U.S.-Canadian tariffs.”
Elsewhere in northwestern Ontario, communities are grappling with an indefinite shutdown of Interfor’s sawmill in Ear Falls, announced in October, as well as the continued shutdown of the Terrace Bay pulp mill since January 2024.
“I don’t think it comes as a complete shock to folks, but nonetheless, when these indefinite shutdowns happen in the community, there’s always significant impact,” Pastore said.
Calls for a softwood lumber deal
U.S. duties on Canadian softwood lumber imports are now at 45 per cent.
“It’s very difficult for Canadian producers to operate in that climate, and we really need to get a softwood lumber deal in place to help not have this trend continue — with sawmills shutting down in the province and in the country,” said Ridler.
He added that in smaller communities that lack other large employers, “it’s even tougher.”
The sawmill’s shuttering comes as Ignace is going through a period of transformation.
The Nuclear Waste Management Organization (NWMO) has selected the township, as well as nearby Wabigoon Lake Ojibway Nation, as a preferred host community for Canada’s first deep geological repository.
If approved, the project would see Canada’s nuclear waste buried hundreds of metres underground in a proposed $26-billion facility built between the two communities.
‘There’s a bit of a silver lining’
The Impact Assessment Agency of Canada says the nuclear waste project is expected to span 160 years and provide permanent storage for about 5.9 million bundles of used nuclear fuel. The agency is collecting public feedback until Feb. 4 to inform the next phase of the assessment.
The project has faced opposition from several First Nations and environmental groups, which have cited concerns around potential safety risks and environmental harms.
The northern Ontario community of Ignace has agreed to be the future home of Canada’s nuclear waste. The National’s Nick Purdon went to the region to find out why the majority of people were in favour of the move and see how the toxic materials will be stored deep underground.
Meanwhile, work is underway to build the NWMO Centre of Expertise in Ignace, which “will be home to a technical and social research program and a technology demonstration program that displays the entire process of packaging and placing the containers of used nuclear fuel in the repository,” the NWMO’s website says.
That, combined with efforts to construct a new housing subdivision in town, will create more local job opportunities, Pastore said.
“I think there’s a bit of a silver lining with the folks that may be getting displaced right now at Domtar,” he said. “Their services, their trade skills, their labour skills are going to be required over the course of the next six to 12 months.”
As Ignace prepares for a potential population boom tied to the nuclear waste repository’s approval, Pastore said a lot of work is underway to diversify the local economy.
“We’re getting into a position for the community where we’re going to try and be in a market that doesn’t have cyclical ups and downs in the economy,” he said.
“We know that there’s going to be opportunity for those who can stay in Ignace, that’s for sure.”
