Town of Kapuskasing


Kapuskasing is the “Model Town of the North” not just because an urban planner carefully designed it in a way that best suits its surroundings, but also because it’s home to the most diversified economy in Northern Ontario.

Just 150 kilometres north of Timmins, Ont., the town’s booming pulp and paper mill, mining industry, hydroelectric energy projects, and renewable energy startups attract growing numbers of people who choose to make the northern municipality their home.

The Canadian Business Journal spoke with Mayor Alan Spacek about Kapuskasing’s entrepreneurial spirit, its diverse economy, welcoming community and some upcoming projects.

A Planned Community

In the 1920s, unlike most northern towns when the population expanded, streets were added on to accommodate growth; an urban designer carefully plotted Kapuskasing. “It was a very articulated community. If you look at our street layout, it works on what is a hub and spoke design. We’ve had a big circle as an entire street in the town from the beginning,” Spacek said. “The streets radiate out from the traffic circle.” He added that to this day the municipality puts resources into maintaining the town’s aesthetics.

Pulp and Paper Mill

In the community of about 8,000 people, Kapuskasing’s economy is made up of the former Spruce Falls, now Tembec, pulp and paper mill, which is the town’s biggest employer. The mill supplies newsprint to Canadian nationals and large American newspapers, including The New York Times. In 1991, employees bought the mill in partnership with Tembec. But three years later Tembec bought out the employees. It has been operating the mill since.

Hydro Power Projects

North of Kapuskasing is the Ontario Power Generation (OPG) Lower Mattagami power complex. It is made up of four generating stations on the Mattagami River. Smoky Falls was built in 1931. It has a size of about 50 megawatts. The OPG plans to replace it with a generating station that would allow the station to use all of the available water efficiently. This means building a new generating station next to the former. The new generating station would be able to pass more water and would have a size of 250 MW.

The other three generating stations – Little Long, Harmon, and Kipling – were all built in the mid-1960s. Little Long has a capacity of about 135 MW; Harmon is at 140 MW; and Kipling 155 MW. OPG plans to build a third generator at each of the three existing generating stations. The entire project combined would add about 450MW of capacity to the provincial system and make even better use of the existing infrastructure.

“That’s a $2.6 billon project, and it’s Ontario’s largest power project in 40 years,” said Spacek. “It’s expected to finish in 2014. There are several thousand people on the payroll, and at its peak, has 1,200 employees onsite.”

To the south of Kapuskasing, Hydromega Inc. has recently completed the construction of four run-of-the-river hydroelectric power projects – Xeneca Power is also developing three facilities on the same river. The project will add close to 19 MW to the provincial electric system.

“Projects of that scale require a lot of logistical support. We’re seeing a lot of local contractors benefitting regionally, whether it’s construction or heavy equipment,” he said. “Hotels are very busy. Restaurants are very busy. Every aspect of the supply and service side is benefitting positively from these power projects.” Kapuskasing is the hub for renewable energy development in Northern Ontario.

A Regional Approach

While Kapuskasing’s economy is diverse, it is also regional. Currently underway is what’s called the Kapuskasing Regional Industrial Mineral Project (KRIMP).

The project was launched in 2010 to identify potential areas of industrial minerals and aggregate in the Kapuskasing area. The first part of the project involved a comprehensive analysis of the industrial mineral sector of the region and to collect available geological data. Industrial minerals under investigation are rare earth, clay, slate, soapstone and silica.

“The scope of the project isn’t just in the Kapuskasing area. Some opportunities were identified up in Hearst and south of Timmins. Again, speaking to that regional concept, it will benefit all of us,” said Spacek.

Prime Agricultural Land

Another attractive feature in Kapuskasing is the plethora of prime agricultural land. As southern Ontario farmland becomes rare, the Kapuskasing area has a more abundant and less costly option.

“We did an inventory of agricultural land in this area and determined that there are about one million acres of Class 3 and Class 4 agricultural land available for development,” Spacek said. “We’ve seen the Mennonite community already take an interest in the area and they are purchasing land and developing it.” The area is one of the largest undeveloped tracts of land in North America.

Budding Green Energy

While Kapuskasing is very industry friendly with its mining, hydro power and agriculture, it also has innovative and growing green energy projects. In fact, Spacek said, the town developed a business model, under Ontario’s Feed-in Tariff program under the Green Energy Act.

In 2012, the municipality announced that Toronto-based Eclipsall Energy Corp. will provide photovoltaic modules for Kapuskasing’s 30 new microFIT solar panel projects. Two local contractors, DBMS Energy Solutions and Strathcona Solar Initiatives, formed joint ventures to work on the project.

“We’ve also developed a business model where we go to other communities and design and submit applications and build their solar projects and even develop partnerships with them,” said the Mayor. “We’re developing a portfolio.”

An Ideal Lifestyle

Because Kapuskasing has such a developed local and regional economy, Spacek said there has been a noticeable increase in people returning and discovering the town as a permanent place to live. He said the community has seen its young people return, as well as people who retired elsewhere coming back to Kapuskasing.

Because there is a large population of people looking to retire, the municipality recently invested in a multi-million dollar upgrade in its senior’s homes.

“Kapuskasing still has that small community feel with all the amenities, real estate is very reasonable and you can live very well here for a lot less,” Spacek said.