Canfor Corp. three-month chart

The beleaguered Canadian forestry industry took another hit Friday, with news that Canfor Corp. is shutting two wood-product mills in Fort Nelson, B.C., indefinitely.

About 435 workers at the PolarBoard mill, which manufactures oriented strand board, and the Tackama mill, which produces plywood, will lose their jobs.

Canfor blamed a high Canadian dollar and low wood-product prices.  

"As the market slump continues without evidence of a turnaround, Canfor must continue to adjust its production to address the reduced market demands," said Canfor CEO Jim Shepard in a statement.

"While implementing prudent production reductions, we are striving to continue to meet the needs of our key strategic customers," he said.

The Canfor announcement is just the latest bad news from the company, which is Canada's largest lumber firm. Last month, it announced the closure of its sawmill in Chetwynd, B.C.

The damage in the forestry sector has been deep and long lasting. The market has been devastated by a perfect storm of low prices, a collapse in the U.S. housing market and a high loonie.

The Canadian Forest Service of Natural Resources Canada estimates that between January 2003 and April 2007, the Canadian forest industry lost more than 22,000 jobs through temporary and permanent layoffs at 184 mills.

Thousands more layoffs have taken place since then.