In what might be the last LPGA major tournament ever to be played in Canada, Kane headed out on to start the second round tied for the lead with Annika Sorenstam.
But the native of Charlottetown struggled with her swing all day to hand the title to American Meg Mallon.
Mallon, who started the day three shots back of Sorenstam and Kane, took advantage of the struggling golfers, firing a three-under 69 to overtake the leaders by the back nine.
Meg Mallon holds up her trophy following her win at the LPGA du Maurier Classic in Aylmer, Que. (CP/Tom Hanson)
Finishing the du Maurier Classic with a six-under 282, Mallon was one shot better than Rosie Jones to earn the winner's cheque for $180,000.
"I'm going to cherish this one for a long time. Hopefully it's not the last Canadian Open," said Mallon, who fired off four birdies and one bogey, who won her first major in nine years.
"Since winning those two majors in 1991, I've had the lead at some point in every major since and it just didn't happen for me," she said.
"And I know how special the majors are."
With the entire nation on her shoulders, Kane was expected to duel with Sorenstam for the tournament's final major of the year.
Kane, a perpetual runner in LPGA events before, stole the hearts of Canadian golfing fans across the nation last week when she claimed her first tournament title at the Michelob Light Classic in Missouri.
But both Sorenstam and Kane struggled as both shot 3-over 39 on the front nine to open the door for Mallon to march up and take the lead.
Kane kept her fans' hopes alive with a birdie on the 10th hole, but bogeys on the par-4 13 and par-5 14 dropped her out of the contention.
Although everyone in the gallery on the 18th hole knew that Kane's bid to become the first Canadian woman to win the tournament since Jocelyn Bourassa did it in 1973 had failed, that didn't stop them from giving her a thunderous applause when she approached the green.
Kane made no secret that this event was special to her and she was determined to win it.
After she completed her round with a two-foot putt to finish at two-under par, she hugged fellow golfers and fought back tears of disappointment.
| du Maurier Classic Final Scores | |
| -6 | Meg Mallon |
| -5 | Rosie Jones |
| -4 | Annika Sorenstam |
| -3 | Diana D'Alessio |
| -2 | Juli Inkster LORIE KANE |
| +1 | Becky Iverson Karrie Webb Se Ri Pak Laura Philo |
"I got tired of reading the newspapers and watching TV. I watched National Geographic one night because I was tired of hearing about myself. I can't tell you how exciting it's been to be part of this week. I was writing the story. I just didn't get the ending."
Kane ended up in fifth place, tied with Juli Inkster.
Sorenstam fell back to third place, at four-under, while rookie Diana D'Alessio, the first round leader, took fourth at 285.
Lost in the excitement was Australia's Karrie Webb, who failed to claim her third major title this year and a $1 million bonus cheque. Webb shot a 70 on Sunday to finish in a four-way tie for seventh place.
Federal anti-tobacco legislation has forced du Maurier to withdraw its 27-year association with the tournament. Since no major company has come forward to support the event next year, the LPGA is threatening to pull the tourney's status as a major.
Although tournament organizers remain optimistic that a company will come forward, many people feel that Canada has lost its major, a popular event among fans and golfers on the tour.
"I'm very sad now," said Kane. "I wanted to win this for them (du Maurier).
"But it's a sad day not only for Canada, but for the LPGA Tour. I'll be a very sad Canadian if we can't somehow find a way to have a tournament here."
