$20 million will help Mercer Peace River modernize, protect good jobs and compete as Canada stands up to unjustified U.S. tariffs
PEACE RIVER, AB, Aug. 26, 2026 /CNW/ -- Since commencing operations in 1990, the Peace River pulp mill has become an anchor of northern Alberta's economy. The mill directly employs 360 people and supports approximately 3,000 jobs across Alberta's forest sector supply chain, including through long-standing relationships with local forest sector operators and sawmills. Its growth reflects the significant benefits that free trade with the United States has delivered for businesses, workers and communities across Canada.
Last week, Washington imposed additional unjustified tariffs on Canadian goods, creating significant uncertainty for workers, businesses and communities, including those that depend on Canada's forest sector. Canada negotiated intensively and in good faith toward a fair and comprehensive agreement. However, the terms proposed by the United States asked too much of Canada and offered too little in return. Canada therefore suspended negotiations rather than accept a bad deal that would undermine Canadian workers, businesses, strategic industries and national sovereignty.
In response, Canada is matching the new U.S. tariffs dollar for dollar, including on pulp and paper, and is providing $7.5 billion in new and enhanced support for affected workers and businesses. As part of these efforts, the Honourable Eleanor Olszewski, Minister of Emergency Management and Community Resilience and Minister responsible for Prairies Economic Development Canada (PrairiesCan), today announced a $20 million federal investment to support the modernization of Mercer Peace River Pulp Ltd., reduce production costs and strengthen the mill's competitiveness in changing global markets.
The investment will support upgrades to the mill's facilities and equipment to improve operational efficiency and enable a shift toward a more profitable mix of hardwood and softwood pulp. Planned improvements include upgrades to heavy black liquor piping, the rebuilding of pulp machine rolls, and improvements to a lime kiln and recovery boiler.
The upgrades are expected to lower production costs, reduce emissions and improve output. They will also position the facility for potential future retrofits related to innovative energy production and carbon capture, creating additional opportunities for Mercer Peace River to diversify its revenue streams and strengthen its long-term resilience.
By supporting productivity, modernization and market competitiveness, the federal government is helping Alberta's forest sector respond to the immediate pressures created by U.S. tariffs while building greater economic resilience over the long term. Today's investment will support good jobs, strengthen regional supply chains and help Mercer Peace River remain an anchor of northern Alberta's economy for years to come.
Quotes
"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 Honourable Eleanor Olszewski, Minister of Emergency Management and Community Resilience and Minister responsible for Prairies Economic Development Canada (PrairiesCan)
"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 Honourable Tim Hodgson, Minister of Energy and Natural Resources
"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."
–Todd Loewen, Minister of Forestry and Parks
"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."
–Dan Williams, Minister of Municipal Affairs
"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."
–Terry Ungarian, Reeve, County of Northern Lights
"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"
–Juan Carlos Bueno, President and CEO, Mercer International Inc.
Quick facts
- The $20 million federal investment announced today is provided through the Regional Tariff Response Initiative (RTRI) which is administered by Prairies Economic Development Canada (PrairiesCan) across the prairie provinces.
- Of the $20 million in RTRI investment announced today, $1 million will be a non-repayable contribution and $19 million is repayable funding.
- On August 25, 2026, the Government of Canada announced an additional $1.5 billion through the Regional Tariff Response Initiative to help tariff-affected small and medium-sized businesses manage immediate pressures, diversify markets, boost productivity, reduce costs and strengthen domestic supply chains.
- The additional RTRI funding is part of a new $7.5 billion package for workers and businesses affected by U.S. tariffs. The package also includes a $2 billion Canada Strong Diversification Fund, $500 million in new BDC liquidity support, $3.5 billion in Rapid Response Supports for Workers and Employers, and new flexibilities under the Large Enterprise Tariff Loan facility.
- Canada's forest sector supports nearly 200,000 workers and serves as a lifeline for more than 300 communities across the country.
- Since August 2025, the Government of Canada has introduced more than $2.6 billion in targeted measures to help Canada's forest sector remain competitive, sustainable and resilient, including support for transformation, market diversification, workers and communities.
- This work is informed by the final report of the Canadian Forest Sector Transformation Task Force, which was established as part of the Government of Canada's efforts to support and transform the forest sector.
- The report was released alongside new and expanded measures to advance that transformation, including nearly $130 million for 56 forest sector projects across the country.
- Mercer Peace River produces bleached market pulp used in tissue, packaging and cellulose-based products. The business directly employs 360 people, supports approximately 3,000 jobs across Alberta's forest sector supply chain and contributes approximately $1.5 billion to the regional economy annually.
- Regional pulp mills like Mercer Peace River play an important role in the forest sector supply chain by processing significant volumes of incidental hardwood from area sawmills, helping keep costs lower for Canadian forest sector operators.
Associated links
- Prairies Economic Development Canada (PrairiesCan)
- Regional Tariff Response Initiative (RTRI) in the Prairie provinces
- Mercer Peace River Pulp Ltd.
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SOURCE Prairies Economic Development Canada
Contacts: Soraya Lemur, Press Secretary, Office of the Hon. Eleanor Olszewski, Minister of Emergency Management and Community Resilience and Minister responsible for Prairies Economic Development Canada, [email protected], 343-574-6781; Tunde Oyateru, Communications Manager, Prairies Economic Development Canada, [email protected]
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