Opposition members prodded the Conservative government Monday over their handling of Canada's concerns that a contentious U.S. bill could cripple cross-border trade.
The early part of Monday afternoon's question period in the House of Commons centred on a controversial "Buy American" clause that be may appended to a US$880 billion stimulus bill working its way through the U.S. Senate.
It's a provision could potentially keep Canadian steel products out of the U.S.
On Monday, International Trade Minister Stockwell Day warned Parliament that it appears that the "Buy American" clause could become even more worrisome for the Canadian economy than originally thought.
Day said "a last minute entry into the legislation in this particular clause that's before their Senate right now, takes it further than just steel or just iron products, but it could go across the board to many other products."
Liberal Leader Michael Ignatieff told the House of Commons that Canadians "want the legislation to be changed" and he asked the government what it was doing to "protect Canadian jobs from American protectionism."
Day said it was not only Canada that would be affected by the "Buy American" provision, but other U.S. trading partners as well. The minister said the Canadian government would continue to lobby their American counterparts.
"We are going to continue to make our concerns known, we will continue to put forward possible solutions and I believe that we will find a solution if we continue," Day said in French.
2,000 jobs at risk in Quebec
Bloc Quebecois Leader Gilles Duceppe said the proposed U.S. legislation "contains a protectionist clause that would contravene WTO and NAFTA rules and would cause the loss of 2,000 jobs in Quebec."
He said it is possible that the bill could be passed into law before the prime minister has a chance to meet face-to-face with President Barack Obama on Feb. 19, when the U.S. president will visit Canada.
"Will the prime minister undertake to call President Obama as quickly as possible and ask him to change the clause which could avoid a lengthy legal battle, as was the case with softwood lumber," Duceppe asked in French.
Day told Duceppe that is "exactly" the route that the Canadian government intends to take.
"We would like to find a solution before the president visits Canada," said Day.
Day 'slightly encouraged' about talks with U.S.
On the weekend, Day met with U.S. economic envoy Peter Allgeier at the World Economic Forum in Davos, Switzerland.
He said he made Canada's position clear to Allgeier, but came away from the meeting with little more than a hint of reassurance that Canada would be exempted from the measure.
"I was slightly encouraged -- and I say slightly because it's a very serious issue with no guarantees that we will come out with what we want here," Day told CTV's Canada AM.
"He said he had been following closely our position, he had been following what the prime minister said last week in the House of Commons and he'd been following what I have been saying."
Day said Obama's administration appears to be taking the issue seriously, but is making no promises that the end result will be in Canada's favour.
He described the amendment as a "protectionist barrier" that could result in retaliatory trade wars that would hurt all the players involved.
"We certainly are making it very clear that if certain actions go forward a certain way, that's going to have negative consequences. We think it can be avoided and we hope he agrees with us."
John Curtis, from the Centre for International Governance Innovation, said Canada was exempted from tough international trade policies in 1962 and 1971, but such measures are not common.
"These are tough times and the U.S. has said it needs to look after national interests," Curtis said.
He added that the proposed amendment to the bill violates both the spirit and the law of NAFTA, but enforcing that law would require years of legal wrangling.
James Blanchard, a former U.S. ambassador to Canada, said Monday that it appears to be unlikely that the "Buy American" clause would hamper Canadian business.
"If we have purchasing agreements, contractual agreements with countries where we agree to buy each other's goods and services, they are apparently not affected," he told CTV's Power Play from Washington.
"My guess is this is going to get all worked out and it won't affect Canada or our normal trading partners," he added.
Stimulus package before Senate
Meanwhile, the controversial stimulus package was to go before the Senate on Monday, but was expected to be a tough sell with strong feelings on both sides of the argument.
Not a single Republican voted in favour of the stimulus package when it passed the Democrat-controlled House of Representatives last Wednesday.
Most Republicans say the bill -- which contains a contentious "Buy American" clause -- is too heavy on spending and too light on tax cuts.
Obama said he has worked hard to reach out to Republicans and listen to their ideas, and is "confident we're going to get it passed."
The bill earmarks some $544 billion for government spending and $275 billion for individual and business tax cuts. It includes infrastructure money for highways and mass transit and spending on unemployment benefits, health care and food stamp increases.
But Republican Senator Jeff Sessions has been questioning why the bill is short on spending for infrastructure projects -- one of many changes that are possible as senators work to amend the measure.
Obama and U.S. Vice-President Joe Biden were scheduled to meet with congressional leaders on Monday to try working out a deal. Obama has signalled he is willing to twist arms, or negotiate, as necessary.
Democrats have also voiced concerns about the massive bill.
Nebraska Senator Ben Nelson, a Democrat, told CNN's State of the Union that it is unclear if some of the investment elements in the bill will actually create jobs.
"I like parts of it that are based on infrastructure, which I think truly will create jobs," he said Sunday.
But he said there's "an awful lot" of spending initiatives including in the bill that are only "marginally supportive and stimulative for jobs."
