With no end to U.S. tariffs in sight, another sawmill shuts down in northwestern Ontario

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.

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.

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.