McCain Foods is closing a french-fry plant on Prince Edward Island, effective Oct. 31.
The company says production has declined by two-thirds over the last 10 years and the plant is now one of it smallest and least efficient.
It also says french-fry sales have been declining in North America and demand has shifted to other countries.
About 121 people will lose their jobs.
Cavendish Farms, owned by the Irving family, is an intense rival in the potato business and also contracts with P.E.I. producers.