The article investigates the feasibility of district heating in a small town adjacent to a Kraft pulp mill in eastern Canada. A detailed heat demand analysis is performed for all buildings using a geographical information system and archived data provided by the municipality. The study shows that the entire space heating requirement of the town can be supplied by steam from the mill, even during exceptional peak demands. A screening test based on load density indicators, however, reveals that a district heating serving the entire town would probably not be economically viable. An economic analysis of partial districts show that a district covering about half of the town can be economically viable with a proper balance between the price of the steam sold by the mill to the district operator and the cost of the energy sold to customers. (Contains 10 tables, 6 figures, and 1 note.)