Pacific West Commercial Corporation will not be reopening the mill in Port Hawkesbury, announced the Nova Scotia government Friday.

"I know this news will be devastating to the workers and their families," said Premier Darrell Dexter in a government news release.

"The province fought as hard as it could for those jobs because this government knows good jobs are the lifeblood of rural communities."

Pacific West Commercial Corporation, the mill's new owner had applied to the Canada Revenue Agency for tax breaks using losses incurred by the mill's previous owner, but the ruling went against the company.

"The tax ruling was a key condition to completion of the transaction and a critical factor in ensuring the economic viability of the mill," said Pacific West in a news release.

"Without the tax ruling, the restart of the mill was made immensely more difficult."

Ronald Stern, Pacific West’s President, said, "It is extremely disappointing for everyone involved in the year-long effort to restart the mill to realize that we have been unable to achieve our collective goal, and that our vision of a world-class, competitive, paper manufacturer in Port Hawkesbury will not be realized."

Town is 'resilient'

Dexter said that the employees took significant steps to set the mill up for restart on a competitive basis, and that Richmond County worked hard to arrive at a fair agreement on property taxes.

"The key for Nova Scotia was that this mill operates for the long term and that the jobs be there for decades to come, not just a year or two," he said.

Port Hawkesbury Mayor Billy Joe MacLean told CBC News that, "It's a very sad day for the strait region in total and eastern Nova Scotia."

However, MacLean said he doesn't blame the government for the deal falling through.

"I feel very, very bad and very, very sad for all of the employees that were waiting patiently for the past year…to have this news this evening is just unbelievable and the impact is going to be very hard to overcome," said MacLean.

We are, in this community, rather resilient in terms of regrouping and asking our people to come forward and I know that the government — federal and provincial — will be there to help us out."

Dexter will meet in the next few days with municipal officials and other community leaders to discuss transitional support for former workers, and those in the forestry sector.

"This is not the end. I said from the beginning that the province will stand with the Strait area, and just because an agreement was not reached doesn't absolve us of that commitment."

It was announced in August, 2011 that the NewPage Corporation would idle the mill.