A spokeswoman for Premier Stephen McNeil said the Pictou County mill asked to harvest an additional 500,000 green metric tonnes of fibre from Crown land.
Laurel Munroe said McNeil told a business luncheon Thursday in Halifax that the mill's request was being turned down.
After the luncheon, McNeil said, "if private sector investors aren't prepared to invest, we seriously have to ask 'Why are we?'"
Munroe said the government is also refusing to fund an oxygen delineation project at the mill in Abercrombie at a cost of $27 million to $30 million.
General manager Don Breen said the mill believed the government was still considering its request, and he only learned otherwise through media reports.
"We've been working with the government and with sawmills to try to come up with a win-win for all of us around Crown allocation," Breen said in an interview.
"We were surprised that he announced that today, because we thought we were still in discussions."
When asked whether the mill had also been seeking financial assistance, Breen said the mill is constantly in discussions with the government for various projects but it had not made any formal requests other than for the Crown land.
Munroe said McNeil was unavailable for further comment. But she said the government will honour a commitment made by the previous NDP government allowing Northern Pulp and Paper to harvest 125,000 green metric tonnes of fibre.
Breen said the mill will continue pressing the government for more access.
"We need fibre to survive," he said. "We will want to continue discussions with government and with the sawmills and see if we can continue the dialogue and come up with a solution here."