The shut down is indefinite, putting 190 workers out of work. Company officials were in town Thursday to deliver the news to employees.

"Despite efforts by our Peace Valley team to reduce costs over the past several months, this decision is necessary to support the optimization of our OSB business in challenging market conditions," said Jason Ringblom, LP Executive Vice President for OSB, in a statement.

"Declining housing starts, high wood costs and associated cost pressures require us to take this action that aligns with our performance driven strategy."

Mark Morrison, LP's director of corporate affairs, says total housing starts are down 13% from a year ago as reported by the U.S. Census Bureau, with commodity OSB prices down more than 35% compared to this time last year.

"The action that LP is taking now is driven by poor market conditions and not a reflection on our team at Peace Valley who have been hard at work looking at ways to reduce cost for several months," Morrison said.

Work will reportedly continue at the mill until the shut down, effective August 9, employees say. Employees say they will be paid through until early September, and then receive a severance package based on their years of service.

The mill has an annual capacity of 800 million square feet. It is the city's largest taxpayer, paying $1.05 million in property taxes last year.

"We are deeply shocked by the announcement today by Louisiana-Pacific Corporation, and share in the pain of this devastating news for our community and the families affected," acting mayor Gord Klassen said in a statement.

"Council has reached out to Louisiana-Pacific to offer support, as it always has, in getting the plant reopened and our residents back working."

The pending shutdown of the Peace Valley OSB mill in Fort St. John is the latest blow to B.C.'s struggling forestry sector, MLA Dan Davies says.

The bad economic news follows on the heels of announcements this week that Norbord will indefinitely curtail its OSB mill in 100 Mile House, and that Canfor will curtail operations at all but one of its sawmills in B.C.

"This latest shutdown will put at least 190 workers out of work and will affect hundreds of additional indirect jobs. My community simply can't afford this loss," said Peace River North MLA Dan Davies said in a statement.

"For months my fellow MLAs and I have raised concerns about the mounting crisis in the forest industry and for months our concerns have been ignored. It's time for John Horgan and the NDP to step up, take action and offer tangible solutions to address the crisis situation."