One of the people behind Edmonton's bid to host a National Portrait Gallery says he's "extremely disappointed" the federal government has cancelled the project.

"As a taxpayer, as a Canadian who has lived in a number of cities and a number of provinces in the country, I was extremely excited" by the gallery plan, said Ken Cantor, commercial developer for Qualico, which put in one of Edmonton's two bids.

"I thought this was a wonderful, wonderful opportunity to do some nation-building."

In 2007, the Conservative government scrapped a Liberal plan to set up the gallery in Ottawa, instead allowing nine cities to bid for it.

Edmonton and Calgary were among the three finalists, but newly appointed Heritage Minister James Moore said Friday none of the proposals received from developers is acceptable to the government in this time of economic uncertainty.

Cantor said he's not buying that explanation.

"I can't imagine anything, certainly, in our submission that would have been deemed to have been outside the acceptable parameters that they set in what they drafted," Cantor said.

"If that's the case, you could have read that and determined that in a week. You didn't need six months to decide that."

Cantor said he found out the project was being killed when he received an e-mail from the government, but the $1-million deposit his group submitted with its proposal has yet to be returned.

The Alberta government had pledged $40 million to bring the portrait gallery to that province.

The portrait collection is currently housed out of public view in an Ottawa-area building operated by the National Archives. The government said it will continue to be available for travelling exhibitions and other public programs.