Residents in the Antigonish area will have their say on whether the town and county should amalgamate.

In a ruling Tuesday, the Nova Scotia Court of Appeal said the province's utility and review board has jurisdiction to oversee a merger.

Antigonish Mayor Kay Chisholm is disappointed the town lost its appeal.

"This is not a good decision, not only for the Town of Antigonish but for all towns in Nova Scotia who need to grow. This is what I call killing small-town Nova Scotia," she said.

The case goes back to 2001 when the town decided it needed room to expand and applied to annex 1,600 hectares from the surrounding Municipality of the County of Antigonish.

The county responded that annexation would hurt its tax base, and applied for a total merger.

In February 2005, the Nova Scotia Utility and Review Board said people living in the Antigonish area would be better served if the two municipalities amalgamated.

The board also ordered a plebiscite to gauge how residents feel about a merger, and promised to consider those results when it made a final decision.

The town appealed the review board's decision, arguing it didn't have the jurisdiction to order a merger.

Barring any further appeals, the utility and review board's next step is to set a date for the plebiscite.

Herb Delorey, warden of Antigonish County, says the two municipalities have already spent a combined $1 million on this dispute, and he hopes the issue can finally be put to rest.

"The general public don't see an imaginary line or boundary line. Our children go to school under the same roof," Delorey said.