The Tolko sawmill in High Level, Alta., will be shut down indefinitely by mid-January, the company announced Friday.
"We continue to be in the worst market conditions our industry has ever seen," said Mark Harkies, a vice-president with Tolko Industries, in a release.
"The current cost structure at High Level simply makes the continued operation of that mill not viable."
About 285 mill employees will be out of work in the town of about 4,000, located about 700 kilometres north of Edmonton.
"It's not going to be a short turnaround," said High Level Mayor Peter Ernst.
"If we don't have logs in the yard for winter, there won't be anything in the summer, which then means we have to sit through to next winter before they even get any logs," said Ernst.
"So it's going to be a long, one- to two-year shutdown, and nobody wants to sit around like that. Some of these guys, we've got people at this mill that have been there for 30 years."
The company tried to get workers to agree to new job conditions recently but the deal was rejected by 91 per cent of the union members, Ernst said, adding that it's a hard blow to a community reeling from the downturn in the oil industry.
"There's a number of people that are actively sitting around waiting for the price of oil to come up, and now to have this. So it's quite conceivable that we could have one-third or higher unemployment," Ernst said.