The leaders of Canada's provinces are calling for an expanded free-trade agreement as lobbyists press U.S. legislators to soften Buy America purchasing policies.
Should the United States move to shut Canada out of the marketplace, Canadian municipal leaders say they are prepared to retaliate similarly with their spending.
Provincial premiers want the United States to extend free trade to provincial, state and municipal levels as both countries rely on each other for jobs.
Trade Minister Stockwell Day said it's estimated that $800 billion (U.S.) in stimulus spending could potentially come under Buy America restrictions.
That would require America's local governments to use only U.S. steel and manufactured goods in many cases.
"Canada-U.S. trade is about 70 percent intra-industry, so we're building vehicles and other things together and any proposal that discriminates against Canadian products really damages the North American industry," said Canadian trade lawyer John Boscariol.
Officials say that in 35 key states, 7.1 million American jobs are dependent on trade with Canada.
The U.S. Chamber of Commerce estimates it would cost American industry $15 billion a year if Canadian cities banned U.S. suppliers from future municipal procurement.
Governing showdown looms over stimulus
Canada faces another threat of the minority Conservative government of Prime Minister Stephen Harper being defeated over its economic stimulus plans.
Liberal leader Michael Ignatieff will say Monday if his party will endorse the government's economic report or trigger a no-confidence vote to topple the government and set the stage for a national election.
The New Democrats and Bloc Quebecois have rejected the plans, while Ignatieff's main concerns are the size of the deficit and how much of the stimulus money is actually being dispersed.
Harper said 80 percent of the $26.3 billion (U.S.) in planned economic stimulus funds for this year has been committed.
News in brief
• Many Canadian health authorities don't believe the H1N1 swine flu can be called a full-fledged pandemic as the World Health Organization has done. In Canada there have been 2,978 cases, with four deaths linked to the illness. Most of the cases in Canada have been mild, and Chief Medical Officer David Butler-Jones said they are similar to "a seasonal flu."
• Bank of Canada Governor Mark Carney said governments need to withdraw stimulus support for the troubled financial system at the right time or risk harming the economy. He told the International Economic Forum of the Americas in Montreal the world cannot withstand having governments being the main agents of growth and the key guarantors of financial market stability. Public sector intervention has been necessary but global economies will only truly recover when the private sector re-engages and assumes the risk, he said.
Facts and figures
A stronger U.S. dollar sent Canada's currency lower on Friday to 89.33 cents U.S. The U.S. greenback was worth $1.1194 Canadian, before bank exchange fees.
The Bank of Canada's key interest rate remains at 0.25 percent and the prime lending rate is 2.25 percent.
Stock markets were higher Friday, with Toronto's composite index at 10,617 points and the TSX Venture index at 1,149 points.
Lotto 6-49: (Wednesday) 9, 27, 28, 40, 45 and 48; bonus 24. (June 6) 11, 12, 18, 21, 30 and 37; bonus 1. Super 7: (June 5) 8, 25, 27, 33, 34, 43 and 47; bonus 1.
• Additional resources have been sent to help fight a massive forest fire near Lillooet in British Columbia's interior. It had doubled in size to cover an area of about 10,000 acres in two days outside Tyaughton Lake, causing people to leave their homes in the remote area. There are more than a dozen smaller forest fires burning in the province.
• A weaker demand for lumber and a higher-valued Canadian dollar making Canada's products more expensive prompted Tembec to close all of its Northern Ontario sawmills for up to six weeks. About 500 people are affected at the sawmills in Kapuskasing, Chapleau, Cochrane and Hearst. In British Columbia, Tembec is closing sawmills at Elko and Canal Flats for at least three weeks.
• Workers at a small Nova Scotia distillery are raising their glasses to toast a victory against the Scotch Whisky Association. The Supreme Court of Canada dismissed an application by the association for its third appeal of a ruling allowing the trademark registration of Glen Breton whiskey. For nine years, the association argued that use of the name Glen would lead consumers to believe the product was made or bottled in Scotland.
Jim Fox can be reached at email@example.com.