One hundred and ten workers are now jobless, and many of them say their skills are not easily transferrable.
"We can’t go to make car parts," said Robeena Salam, who worked at the factory for seven years.
"We did more than 30 years of sewing and now we have nothing left."
Rick Droppo, the factory’s director of manufacturing, said Forsyth was forced to shut down its Cambridge operation because the federal government cancelled a vital subsidy known as the Duty Remission Program.
Losing the subsidy cost the company around $2 million a year.
The subsidy allowed clothing companies in Canada to import products duty-free as long as they maintained some domestic production.
Over 75 per cent of Forsyth’s manufacturing is done overseas. The factory in Cambridge made uniforms for companies like Tim Hortons and Harry Rosen. Droppo said the owners tried to keep the factory running as long as it could.
"Forsyth could have been much more profitable over the years if they just cut the factory loose," Droppo told CBC News.
"Financial lenders and consultants over the years have almost insisted that they do that, and yet the owners of Forsyth refused to give in."
Droppo and many of his staff say they are frustrated with the federal government's decision to cancel the Duty Remission Program.
In a public statement, Cambridge North Dumfries MP Gary Goodyear expressed sympathy for the workers at Forsyth and that he had been "working to find a viable solution" to the issue.
However, he also pointed out that the Duty Remission Program was never meant to be a permanent subsidy.
The John Forsyth Shirt Company has deep roots in Waterloo Region. It was founded in Waterloo in 1903, and operated a factory in downtown Kitchener for 88 years.
The company was family owned until 1973, when it was sold to Dylex Ltd. in Toronto. The Kitchener factory was closed in 1996, when operations moved to Cambridge.
On Feb. 22, the company filed for bankruptcy protection at the Ontario Superior Court of Justice.