Canada is investing in the long-term strength of Alberta’s forest sector with a $20 million commitment to modernize Mercer Peace River Pulp Ltd., helping the northern Alberta mill remain competitive as businesses navigate the economic impacts of new U.S. tariffs.
The Peace River pulp mill has been a cornerstone of the region’s economy since opening in 1990. Today, it directly employs 360 people and supports approximately 3,000 jobs across Alberta’s forest sector supply chain through long-standing relationships with local forestry operators and sawmills.
The federal investment comes after the United States imposed additional tariffs on Canadian goods, including pulp and paper products. In response, Canada suspended trade negotiations rather than accept terms it said would undermine Canadian workers, businesses, strategic industries and national sovereignty. Alongside matching the new U.S. tariffs dollar for dollar, the federal government has introduced $7.5 billion in new and enhanced support for affected workers and businesses.
Announcing the investment, The Honourable Eleanor Olszewski, Minister of Emergency Management and Community Resilience and Minister responsible for Prairies Economic Development Canada (PrairiesCan), emphasized the importance of protecting workers and communities.
“Canada did not choose this trade conflict with the United States, but we will stand up for the workers, businesses and communities under pressure. For more than 35 years, Mercer Peace River has been an anchor of northern Alberta’s economy. This $20 million investment will help the mill modernize, compete and protect the good jobs that families across the region depend on as we build a stronger, more resilient Canadian economy.”
The funding will support a series of modernization projects designed to improve efficiency and lower operating costs. Planned upgrades include improvements to heavy black liquor piping, rebuilding pulp machine rolls, and enhancements to the mill’s lime kiln and recovery boiler. The work will also enable the facility to shift toward a more profitable mix of hardwood and softwood pulp production.
The Honourable Tim Hodgson, Minister of Energy and Natural Resources, said the investment reflects the federal government’s commitment to strengthening Canada’s forestry sector.
“Canada’s forest sector creates good jobs and drives economic growth in hundreds of communities across the country, including in Peace River. Our government is proud to invest in Mercer Peace River’s modernization, so the Canadian forest sector can not only survive but thrive, and become stronger, more competitive more resilient for years to come.”
The upgrades are expected to reduce emissions, improve production efficiency and position the mill for future investments in bioenergy production and carbon capture technologies, creating new opportunities to diversify revenue while strengthening long-term resilience.
The Government of Alberta is also contributing to the mill’s future. Todd Loewen, Minister of Forestry and Parks, highlighted Alberta’s complementary $17.1 million support package.
“The Mercer Peace River mill has been a cornerstone of the Peace region economy for more than three decades, and our government wants to see that continue. In addition to the federal investment, Alberta is providing $17.1 million in relief to help Mercer on their proven a path to viability. Innovation has long been the path to success in Alberta and Mercer is well positioned to transition to a new and diversified business model that will sustain its operations for years to come.”
Local leaders also welcomed the announcement. Dan Williams, Minister of Municipal Affairs, noted the importance of preserving jobs throughout the region.
“Mercer Peace River Pulp has anchored our regional economy for more than 30 years, supporting hundreds of local jobs and thousands more across Alberta’s forest supply chain. As the MLA for Peace River, I welcome any investment that helps our mill modernize and stay competitive through a tough time for global trade. Our workers and our community deserve nothing less.”
Terry Ungarian, Reeve of the County of Northern Lights, described the investment as a milestone for the region.
“Council for the County of Northern Lights has a strong and longstanding relationship with industry partners such as Mercer Peace River, and we recognize the tremendous socioeconomic benefits they bring to our region. The importance of today’s announcement cannot be overstated. It represents a significant investment in our region, our people, and our future, and we are proud to be part of this important milestone.”
For Mercer International, the modernization program represents an opportunity to improve both current operations and future growth.
“Mercer Peace River plays an important role in northern Alberta’s forest products economy, and these investments are intended to improve the mill’s efficiency and competitiveness. This support will help us modernize important infrastructure while preparing the facility for potential future expansion of bioenergy production and carbon capture and storage. We appreciate the Government of Canada and PrairiesCan’s support, and I want to recognize our Peace River team for the work they continue to do to move these improvements” said Juan Carlos Bueno, President and CEO, Mercer International Inc.
Together, the federal and provincial investments aim to strengthen one of northern Alberta’s key industrial employers, helping protect jobs, modernize operations and position the facility to compete in an increasingly challenging global marketplace.
