US Tariffs Leave Quebec Mill Town of Témiscaming in Limbo

The paper mill that anchors Témiscaming, Quebec, is idle after trade talks between Canada and the US broke down and President Donald Trump imposed more tariffs. In early October, its American owner RYAM went ahead with an "economic shutdown" for "an indefinite period". Most of the mill's 360 employees are out of work. They are kept afloat for now with partial pay from government tariff relief.

The town was built over a century ago around the mill and the surrounding forests. Property values fell almost overnight. "For Sale" signs dot the yards, and there are fears that grocery clerks and hospital doctors could leave next.

Pockets of pain in a steady economy

Canada's economy as a whole has weathered the trade war with its largest customer. Unemployment has stayed around 6.5% since the tariffs began, with tepid but consistent growth. Industries hit directly by US tariffs of up to 50% are another matter. They include steel, aluminium, cars and, in Témiscaming's case, lumber, pulp and paper.

In August, after talks collapsed, the US imposed 50% duties on about C$28bn of Canadian goods, including pulp, stationery and boxes. Canada answered with dollar-for-dollar counter-tariffs. The mill makes paperboard used in frozen-food packaging and in scratch-off lottery tickets. It sends roughly 75% of its output to the US. Some tariffs on Canadian goods were lifted last week after lobbying by Maine Senator Susan Collins, but not for products from this mill.

"If the mill goes down, it'll turn into a ghost town," said Ronnie Raymond, who comes from a family of mill workers. A local contractor has already laid off 13 people. Mayor Alain Gauthier calls the tariffs "a bomb to shut down our manufacturing in Canada". He wants Ottawa to retaliate with duties on US board products, which now enter Canada tariff-free.

Union leader Stéphane Lefebvre and others feel forestry has taken a back seat to steel and autos. Industry Minister Mélanie Joly has threatened Stelco with financial penalties or a forced sale of its assets if it goes ahead with layoffs of some 500 workers. Prime Minister Mark Carney and Ontario Premier Doug Ford announced nearly C$9bn ($6.4bn; £4.8bn) for Ontario's steel and auto sector.

A buy-back plan

In 1973 the mill's then-American owner threatened to close it. Workers and managers bought it and turned it into Tembec, a Quebec-owned company. Now a coalition of locals wants to buy the plant back from RYAM, which bought it in 2017. Union leader Stéphane Lefebvre says they need tariff relief or financial support from Prime Minister Mark Carney and the Quebec government. "We're hoping that lightning will hit twice," he said. RYAM declined to comment on a sale.

Frank Dottori knows the earlier effort from the inside. He is in his 80s and lives in retirement in Témiscaming. In the 1970s he was an engineer at the mill, when employees agreed to a 10% cut to buy it collectively, and he went on to become chief executive. He says today's buyers need a leader just as bold. He considers it highly unlikely that the local group has one today, but says it could find one if it organises.

A spokesperson for Industry Minister Mélanie Joly said Ottawa has made $400m available to support forestry in rural and remote areas. The spokesperson said the government is working with all parties to find a viable solution.

Workers hope for a resolution before winter, when sub-zero temperatures could freeze equipment at the idle plant and make reopening harder.

Source: BBC