The Canada Bread Factory is closing its plant in Woodstock, dealing a swift blow to the Carleton County town, where it employed 70 people and has been a part of the community for decades.

Calling the plant old, the company said the former Karnes bakery will close Aug. 10. A letter to employees says the decision was made after a worker was injured.

Sylvia Sicuso, a spokesperson for Canada Bread, said employees were informed Tuesday that the plant was shutting down.

The Canada Bread bakery in Woodstock is closing, according to Woodstock's Mayor Arthur Slipp. 0:58

Woodstock Mayor Arthur Slipp said he has spoken with management at the plant.

"We were told it was an irreversible decision, that they have capacity in other plants in Moncton and in Ontario," Slipp said.

Canada Bread's brands include Ben's, Dempster's, Villaggio and Vachon.

Jobs moving to Moncton

Some of the 70 lost jobs will be relocated to Canada Bread's Moncton factory. (Google Maps)

Sicuso said Canada Bread will be expanding its Moncton operation to compensate for the loss of production in Woodstock.

The reason for the move is that the Woodstock plant is old, she said.

"It would require significant investment to get it operating efficiently," said Sicuso.

She said the plant had already stopped producing sliced bread and rolls.

But according to a copy of a management letter given to employees and leaked to CBC News, an employee injury prompted the closure.

"At the end of May, a member of the maintenance team was injured when he started up a fan on the [line] which bakes sliced bread and rolls," Bimbo Canada, a subsidiary of Grupo Bimbo, a Mexican multinational that owns Canada Bread, said in the letter.

The letter went on to say an electrical inspection by a third party uncovered a "number of concerns."

From time to time we would hear rumours, but with the expansion and addition of the muffin line a few years ago we thought that things were steady. - Arthur Slipp , Woodstock mayor

The letter did not provide other details of the worker's accident or describe the injury.

So far, CBC News has been unable to speak with any employees of the factory on the record, and the letter they received about the closure asks them not to speak to reporters.

"If [employees] are contacted by a reporter, they must politely indicate that they are not the person to comment on this matter," said Bimbo Canada.

"Only designated company spokespeople are authorized to speak to media."

Blow to town

Woodstock Mayor Arthur Slipp said the loss of the bakery will have a "significant impact" on the town. (Sarah Morin/CBC)

Canada Bread was of the biggest employers in Woodstock, and the loss of 70 jobs will be felt said Slipp.

"It's going to have a significant impact on the region," said Slipp.

"It has been a very longstanding employer and it was a wonderful factory, and they had a good relationship with the community over the years."

The factory was expanded in 2015 to include a line for baking muffins.

The expansion happened after the closure of a Canada Bread plant in Nova Scotia and it brought 20 jobs to the Woodstock bakery.

Slipp called the closure "sudden."

"From time to time we would hear rumours, but with the expansion and addition of the muffin line a few years ago we thought that things were steady," said Slipp.

"It did catch us by surprise this week when we heard."

Eligible for Moncton jobs

Sicuso didn't know how many jobs would be up for grabs after the Moncton expansion but said it's likely to be fewer than the 70 jobs lost in Woodstock.

She also said employees in Woodstock will be given an opportunity to get one of the Moncton jobs.

"We've encouraged [employees], if they're willing to relocate, to apply for jobs in Moncton," said Sicuso.

"They would be considered first because of their tenure."

The company also plans to support laid-off workers through severance packages, help with job placement and counselling assistance.

Long history

Karnes Bakery was founded in 1946 by brothers John and Ken Karnes. (CBC)

The bakery has a long history in the New Brunswick border town.

The Karnes family settled at the site of the bakery in 1870.

Gertie Karnes started baking bread out of the family toolshed because she couldn't cook in the Karnes home during the summer heat.

In 1946 Gertie's brothers John and Ken opened Karnes Bakery and at one point it was the largest employer in Woodstock, with more than 100 employees.

Throughout that time the continued to use Gertie's recipes.

Her most famous, according to John's son Patrick Karnes, was her brown bread.

John and Ken Karnes opened the bakery in 1946. (CBC)

"They really were famous for it," Karnes said.

"They shipped that brown bread into the U.S. market. It was very popular in New England supermarkets."

Karnes Bakery was sold in 1982.

The factory was expanded in 2015 to include a line for baking muffins.

The expansion happened after the closure of a Canada Bread plant in Nova Scotia and brought 20 jobs to the Woodstock bakery.

Even though the business hasn't been owned by the family for 36 years, and Karnes stopped working there in 1997, he said there's still a feeling of loss in the family.

"We're all really sad to see this come to an end," Karnes said.