The Saskatchewan government is pulling its financial support for an inner city project that would have provided a home for health clinics and a co-operative grocery store.

Before last year's election, the former NDP government promised $8 million for the $11.5-million project known as Station 20 West.

It was described then as a partnership between the provincial government, the Saskatoon Regional Health Authority, the City of Saskatoon, Quint Development Corporation and CHEP Good Food Incorporated. The development was supposed to open in the area of 20th Street West and Avenue K in 2009, but now its future is in jeopardy.

Project manager Paul Wilkinson said he felt shock and disbelief when he recently received a letter from the province confirming it was pulling its support.

"Kids here don't get dental services now — [families] can't afford it," he said. "It was going to happen. The community clinic was going to offer expanded services."

What's available now is just barely meeting demand, he said.

Premier Brad Wall said he's cancelling support for the project because it would compete with other businesses.

"We don't think that the government of Saskatchewan should be opening up, basically, a mall development where we'd be competing with grocery stores and competing with others who are renting to community clinics in the area," Wall said.

Provincial Health Minister Don McMorris said the government has other spending priorities.

"We have needs in our health-care system that are immediate, that are safety issues, and that is where our government is choosing to put its priority, No. 1," he said.

A substandard fire alarm at St. Paul's hospital in Saskatoon is among those priorities, he said.

Community organizers said the Saskatchewan Party government does not fully understand the need for the project. They hope the government will reconsider its position.