The Bowater Mersey mill's closure can be blamed on market conditions, according to Richard Garneau, president and CEO of Resolute Forest Products.

Premier Darrell Dexter says the mill closure is not because of a lack of effort.

"We've worked with the employees and government to try and save the mill. The economic slowdown around the world has made the situation untenable," Garneau said.

"We really tried hard to find a way forward for this mill to operate, but we never expected overseas demand would go down by 25 per cent."

Garneau said Resolute has already put its assets up for sale. He said the company has had some interest in its sawmill in Lunenburg, its electrical company generation plant, as well as a half a million acres of land.

But he wouldn't say much more than that.

Garneau said it's "a company not from North America. Who is it? Not going to tell you. It's a negotiation."

Premier Darrell Dexter says the closure of the mill in Brooklyn is a huge blow to southwest Nova Scotia

'Who would have ever thought that a mill would be here this long and stay this long and then go. It's really sad.'—Al Robart, Mill Worker

Resolute Forest Products announced Friday the mill will close for good on Saturday. This comes just months after the province offered the company a $50 million package to keep the facility's doors open another five years.

"I have no regrets about the investments we made in the community, the workers and their families," Dexter said in a release. "I believe it was the province's responsibility to do everything it could to protect jobs on the South Shore, and help this mill survive."

Of the $50 million the province offered, $23.75 million was used to purchase 10,117 hectares of land in five counties in western Nova Scotia.

The mill spent $605,000 of the $1.5 million set aside to retain and train workers over a two year period, .

The remaining money offered was either not used or has been returned to the province.

The closure will cost 320 jobs inside the mill, and many more in the woodland and sawmill operations connected to the business.

"I'd rather fight for good, secure jobs with every reasonable effort than never try at all."

But the Liberals don't see it that way.

Leader Stephen McNeil is calling Dexter's support plan a costly mistake.

"From the beginning, we had concerns with the $50-million Bowater deal and the Dexter government's failure to secure guarantees, both in terms of jobs and the mill's long term future," McNeil said in a release.

He called Friday's announcement a devastating time for the families on the South Shore.

The NDP should have done more by ensuring the province would benefit from the bailout package, McNeil said.

"This government missed an opportunity to keep the mill open and operating on the South Shore," he said.

But Dexter said the province isn't giving up just yet.

"This closure shows that no mill and no industry – even in rural Nova Scotia – are immune to the challenges facing the global economy," he said. "I have already begun discussions to appoint a transition advisor to work with the community, local business leaders, and the municipalities to help keep the economy growing."

Liverpool community reacts

Al Robart is one of the mill workers trying to come to terms with news that the largest employer in town is shutting its doors.

"Well I've worked almost 20 years in the mill, and most of that's been on the paper machines. Everybody's worked hard," Robart told CBC News.

"We've given them everything they asked for, and it just seems that they want more and more, until finally it's just going to close it down. Who would have ever thought that a mill would be here this long and stay this long and then go. It's really sad."

The layoffs and increasingly frequent shutdowns of the Bowater mill still didn't prepare people in town for Friday's turn of events.

"Should have seen it coming, but still shocked," said Ray Slaunwhite, a Queens County resident .

The Bowater Mersey mill employed generations of families for more than 80 years, its closure means a 10 per cent hit to the tax base of queens.

Canadian Taxpayers Federation calls for investigation

In a press release on Friday, the Canadian Taxpayers Federation called on the Nova Scotia Auditor General to investigate the $23.75 million land deal between the province and Resolute Forest Products.

In the release, Kevin Lacey, atlantic director for the CTF said it has been calling on governments across Canada to end corporate deals with struggling companies.

"This is a sad day for South Shore Nova Scotia, but when are our governments going to learn that these corporate bail-out deals normally go wrong, leaving taxpayers holding the bag?" Lacey asked.

"Our politicians should have known better than to hand a struggling company bags full of taxpayer money, only to see them run back to their head office in Quebec as quick as they possibly could."

Union tells province to 'step up'

The union released its own statement, wasting no time in telling the provincial government it needs to make a move.

Dave Coles, the president of the Communications, Energy and Paperworkers Union of Canada, said the government needs to immediately purchase the private forest lands owned by Resolute Forest Products.

He said it's important "to ensure the citizens of Nova Scotia have access to forest-dependent jobs and their community for the long run."

Chuck Shewfelt, the CEP's Atlantic Regional Vice-President called the mill closure a "disaster for the community and the province."