Besides potential overruns, government officials are leery of what the future holds for one of the bidders, Atomic Energy of Canada Ltd., the Toronto Globe and Mail reported.
Energy and Infrastructure Minister George Smitherman said bids submitted for the project did not come in at "suitable" levels that would allow the province to proceed.
Smitherman said putting the project on hold does not mean the province is abandoning its commitment to nuclear energy.
"Emission-free nuclear power remains a crucial aspect of Ontario's supply mix," Smitherman said.
Ontario Premier Dalton McGuinty's administration had been planning to spend $26 billion expanding and refurbishing the province's nuclear reactors to meet power demands expected in the next 20 years.
Besides Atomic Energy of Canada, France's Areva SA and Westinghouse Electric Co. also had been in the mix.
Smitherman said the Canadian energy company's bid met the terms and objectives set out by the government.
"However, concern about pricing and uncertainty regarding the company's future prevented Ontario from continuing with the procurement at this time," he said.