Centric Health Corp. announced Friday that an offer to buy Toronto's Shouldice Hospital has expired and both parties have decided not to continue with the proposed transaction.
Centric blamed the decision on "recent political developments in Ontario" and uncertainty regarding timing because of that.
"We are disappointed not to move forward at this stage," Dr. Jack Shevel, the executive chairman of Centric, said in a statement.
The $14-million deal required the approval of Health Minister Deb Matthews under the Private Hospitals Act of Ontario.
She released a statement late Friday afternoon.
"We're committed to public health care in our province and continue our work to ensure that Ontarians can access the care they need in the right place at the right time," Matthews said in the statement.
"No new private, for-profit hospitals have been or will be considered in the future."
Shouldice is one of the few private, for-profit medical centres in the province and receives government funding.
Critics had called on Matthews to block the deal, saying it could have major repercussions for medicare in Ontario.
Canadian Doctors for Medicare said Friday it is pleased Matthews didn't rush to approve the sale, calling the deal "risky."
The group took issue with Centric being an American-based corporation that is publicly traded, suggesting patient care could be compromised in a drive for profits.
"We don't want the quality and accessibility of our health care dependent on the whims of the stock market," said the group's chairwoman, Dr. Danielle Martin.
"Ontario should be working to make sure every health-care dollar goes towards patient care, not shareholders' pockets."
The NDP, meanwhile, criticized Matthews for not "immediately and explicitly" rejecting the sale.
"I heard from countless patients, health-care providers and experts who saw this sale as a clear step towards a two-tiered health-care system in our province," said health critic France Gelinas.
"Ontarians are clear: they are not interested in selling off our public health-care system to the highest bidder."
Ontario outlawed for-profit hospitals in 1973, but exempted existing facilities like the Shouldice.