The lighthouse in Peggys Cove housed a post office until last year. (CBC)

Canada Post has closed its operation in Peggys Cove, Nova Scotia, which once housed the post office in its famous lighthouse.

When the lighthouse was damaged by a storm, mould was discovered inside, and the post office was moved to the adjacent Sou'Wester Restaurant and Gift Shop last year.

Last Friday, Canada Post pulled out and took its famous cancellation stamp, which was used to imprint each piece of mail with a unique mark in the shape of the lighthouse.

"We were expecting to move it back the next season," said Brittany Saunders, a clerk at the Sou'Wester. "But I guess that's not the way it's going to be."

Genevieve Latour, a spokeswoman for Canada Post, said being in the lighthouse in its current condition is a safety issue.

"There's mould in the lighthouse, and because Canada Post does not own the lighthouse, there's nothing we can do," she said.

John Campbell, owner of the Sou'Wester, said Canada Post officials simply told him it was being closed down.

"I think the bottom line with it is they're trying to switch from a post office with a postmaster and being in the lighthouse, to a franchise," he said. "They've got no franchise in Peggys Cove."

Campbell said he was asked to take on the franchise and said he would do it if the post office could go in the lighthouse during the summer. He said a "vicious cycle" of bureaucracy began when he called Canada Post to discuss the idea.

'Vicious cycle'

"They said, 'That's almost between you and Transport Canada.' And I called Transport Canada and they said, 'We deal with the post office,'" Campbell said.

Meanwhile, Latour says, the federal Department of Fisheries and Oceans is responsible for the lighthouse and the repairs.

"The decision to make the repairs and then rent a space within the lighthouse is not owned by Canada Post," she said.

Campbell estimated it could cost between $2,000 and $5,000 to make the necessary repairs to the lighthouse to make it safe for people to work in. He said selling stamps at his store is not a solution for tourists.

"The tourists really, really want a cancellation with the Peggys Cove lighthouse on it," he said. "I'd love to have the post office, but I want it to be in the lighthouse in the summer, because that's where it belongs."