The Alberta government has halted construction on the Grande Prairie Regional Hospital and dismissed the contractor, Graham Construction.

The company plans to take the province to court.

The Calgary-based company said in a news release Monday afternoon that it sent a notice of termination to the government on Aug. 17.

Graham Construction said the province failed to provide the money required to build the hospital as designed. It says it offered to bring in a third-party mediator to "reboot" the project and get it finished. The company now plans to sue for damages.

"Graham ... is confident in its forthcoming, fact-based claim for damages arising from the Government of Alberta's actions," the company said.

The news release came hours after Infrastructure Minister Sandra Jansen said a mitigation plan submitted by Graham Construction last month was not sufficient, leading the province to drop the company as construction manager on the hospital project.

"We had asked for a plan that gave us the confidence that the hospital was going to be completed on time and in a manner that we both agreed on, and we feel that didn't happen," Jansen told reporters during a conference call Monday afternoon.

Jansen declined to say what was in the plan. She did not indicate Graham Construction had sent a letter of termination.

Work on the site was halted Monday. The province intends to issue an invitational request for proposals and hire a new company by the end of October. Construction would resume the following month.

A new schedule will be available after a new construction manager is in place.

Jansen said the hospital's exterior is complete. About three-quarters of the work is complete inside.

Long-delayed project

The province has been in a bitter and public dispute with Graham Construction over cost overruns and construction delays.

In July, the province issued a notice of default to Graham Construction, citing construction delays, and gave the company 15 days to come up with a plan to get the project back on schedule.

Graham Construction placed the blame for the delays and cost overruns on the province, saying the government had made changes to the design that required new construction and demolition of completed work.

Jansen declined to say if the company was seeking more money.

The new Grande Prairie Hospital has been in either the planning or construction phase since 2011. The hospital, now slated to cost $736 million, was originally expected to be operational by the end of 2018 or in early 2019.