Espanola was founded in the early 1900s as a company town for the employees of the Spanish River Pulp and Paper company, a subsidiary of the Mead Corporation, which opened a pulp and paper mill there.
The town expanded quickly becoming a bustling company town with a hotel, school and theatre.
On January 21, 1910, a Canadian Pacific Railway passenger train derailed off a trestle 10 km.
east of Espanola.
Forty-three people died from the railcar's 27-foot plunge into the icy water of the Spanish River.
It was one of the CPR's worst railway accidents.

In 1927, Abitibi Power and Paper Company acquired the Spanish River Pulp and Paper Mills from Mead, in a transaction that was subsequently seen to be highly overvalued and having a conflict of interest that was ultimately detrimental to Abitibi's shareholders.
Changing economic conditions brought on by the Great Depression forced the closure of the Spanish River facility in 1929.

Espanola became a ghost town until the Second World War, when the mill site became a camp for German prisoners of war.
During the final years of the Hepburn government, it sought to stimulate employment in Northern Ontario in order to stabilize its political position.
In that regard, it encouraged negotiations between Abitibi and Kalamazoo Vegetable Parchment Company of Parchment, Michigan which resulted in the sale of Abitibi's Spanish River facility (at that time its largest non-economic asset) in 1943.
It subsequently resumed operation as the KVP Company, producing specialty kraft paper.

In 1948, KVP was sued for nuisance in allowing noxious effluent to be discharged into the Spanish River, and an injunction was issued barring it from making any further discharge.
The order was appealed all the way to the Supreme Court of Canada without success.
In 1950, the injunction was dissolved by an Act of the provincial legislature, which provided for any subsequent disputes with KVP to be taken to arbitration, which, together with other legislative changes, effectively curtailed chances for any further injunctions to be issued.
The 1950 Act was not repealed until 2006.

The 1950 Act effectively gave KVP a limited licence to pollute, and serious cleanup efforts did not happen until the 1980s.

In 1966 KVP was bought by Brown Forest Industries, a division of Charles Bluhdorn's industrial conglomerate Gulf and Western Industries.
The Brown Forest Industries operation was later sold to E.B. Eddy, who operated the mill until June 1998.
Now owned by Domtar, it continues to be the town's largest employer.

Espanola got some negative press in the early 1980s when the mill accidentally discharged toxic effluent into the Spanish River, killing fish by the thousands.
The spill acted like a flush, and when the fish came back a few years later, they were reportedly untainted and thriving, although the toxic smell still remained.
Now the mill is said to be one of the most stringent "zero-emissions" pulp bleaching processes in the world, and the area below the Spanish River Dam is a designated fish sanctuary.
Espanola was founded in the early 1900s as a company town for the employees of the Spanish River Pulp and Paper company, a subsidiary of the Mead Corporation, which opened a pulp and paper mill there. The town expanded quickly becoming a bustling company town with a hotel, school and theatre. On January 21, 1910, a Canadian Pacific Railway passenger train derailed off a trestle 10 km. east of Espanola. Forty-three people died from the railcar's 27-foot plunge into the icy water of the Spanish River. It was one of the CPR's worst railway accidents.
In 1927, Abitibi Power and Paper Company acquired the Spanish River Pulp and Paper Mills from Mead, in a transaction that was subsequently seen to be highly overvalued and having a conflict of interest that was ultimately detrimental to Abitibi's shareholders. Changing economic conditions brought on by the Great Depression forced the closure of the Spanish River facility in 1929.
Espanola became a ghost town until the Second World War, when the mill site became a camp for German prisoners of war. During the final years of the Hepburn government, it sought to stimulate employment in Northern Ontario in order to stabilize its political position. In that regard, it encouraged negotiations between Abitibi and Kalamazoo Vegetable Parchment Company of Parchment, Michigan which resulted in the sale of Abitibi's Spanish River facility (at that time its largest non-economic asset) in 1943. It subsequently resumed operation as the KVP Company, producing specialty kraft paper.
In 1948, KVP was sued for nuisance in allowing noxious effluent to be discharged into the Spanish River, and an injunction was issued barring it from making any further discharge. The order was appealed all the way to the Supreme Court of Canada without success. In 1950, the injunction was dissolved by an Act of the provincial legislature, which provided for any subsequent disputes with KVP to be taken to arbitration, which, together with other legislative changes, effectively curtailed chances for any further injunctions to be issued. The 1950 Act was not repealed until 2006.
The 1950 Act effectively gave KVP a limited licence to pollute, and serious cleanup efforts did not happen until the 1980s.
In 1966 KVP was bought by Brown Forest Industries, a division of Charles Bluhdorn's industrial conglomerate Gulf and Western Industries. The Brown Forest Industries operation was later sold to E.B. Eddy, who operated the mill until June 1998. Now owned by Domtar, it continues to be the town's largest employer.
Espanola got some negative press in the early 1980s when the mill accidentally discharged toxic effluent into the Spanish River, killing fish by the thousands. The spill acted like a flush, and when the fish came back a few years later, they were reportedly untainted and thriving, although the toxic smell still remained. Now the mill is said to be one of the most stringent "zero-emissions" pulp bleaching processes in the world, and the area below the Spanish River Dam is a designated fish sanctuary.
Espanola, Ontario