Terrace Bay Pulp is now under the protection of the Companies Creditors Arrangement Act — a federal law that allows financially troubled corporations to restructure and avoid bankruptcy.

The news comes as no surprise, given the company is already looking for a buyer, said Herb Daniher, a spokesperson for the Steelworkers union. It represents the more than 300 mill workers who are currently laid off.

“But certainly the positive thing is that … the mill can be viable under the right circumstances,” Daniher said. “You get somebody there that … has deep enough pockets that can weather the cyclical nature of the industry.”

The mill unions received news of the filing under CCAA Thursday morning.

A shutdown of the mill at the end of November was supposed to last only three months. However, last week it came to light that the Thunder Bay-based owner — Buchanan Group — had put it up for sale.

In 2010, Ontario provided the company with a $25 million loan guarantee to help it start up after a previous shutdown under creditor protection.

In a statement Thursday, Natural Resources Minister Michael Gravelle said the government's focus will be to act in the best interests of the community of Terrace Bay, as well as the taxpayers of Ontario. Gravelle said he hopes the mill can return to a successful operation under new ownership. A forest industry analyst recently told CBC that a Chinese company is the most likely buyer for the mill.

Ernst and Young has been appointed the CCAA monitor for Terrace Bay Pulp. A spokesperson says the process of finding a buyer is just starting.