After months of job cuts and bad news, employees at Tolko Industries' Kelowna mill learned on Friday the mill will close permanently Jan. 8.

A total of 174 employees including 156 hourly and 18 salaried workers received severance notice.

In a statement from the company, vice-president Troy Connolly blamed the closure on high log prices which make the mill's products uncompetitive.

"We know our people in Kelowna have done everything in their power to make the mill successful," Connolly said. "They have gone above and beyond.

"Sadly, this has nothing to do with them or their efforts. Unfortunately, with B.C. log costs, the mill is no longer cost-competitive," he said.

The news comes with 127 employees at Tolko's Kelowna mill on indefinite layoff since August. Earlier in the year the company permanently eliminated an entire second shift of 90 workers.

Union president Pat McGregor, said the United Steelworkers Local 1-423 was busy handling questions about severance pay details for the Tolko employees Friday. They also want to know if they can access a $69-million B.C. government program recently created to aid job transition for Interior forest industry workers.

McGregor predicted the mill closure will have a trickle-down effect on Kelowna's economy.

"We have good benefits plans so dentists will be affected. Doctors will be affected. It's quite a blow to the community," he said.

President and CEO Brad Thorlakson said the permanent closure is a difficult decision for owners of the mill which has been in operation since the 1930s.

"Our thoughts are with impacted employees in Kelowna," Thorlakson said, adding they will be provided with detailed information on severance packages and benefits.

Where possible, employees will be offered positions at other Tolko locations or assistance in career transition.

Thorlakson said the mill produced highly quality stud lumber for the North American and export markets.

The permanent closure of the Kelowna mill comes near the end of a year in which, according to provincial estimates, approximately 6,000 workers, 25 mills in 22 communities have been affected by closures, layoffs or shift reductions.