Canada passes "Buy Canada" type resolution

Canadian mayors passed a resolution Saturday that would potentially shut out U.S. bidders from city contracts in response to the U.S. administration's "Buy American" policy.

The nonbinding resolution passed 189-175 at the Federation of Canadian Municipalities conference in Whistler, British Columbia.

Federation president Jean Perrault said the fair trade resolution was developed in reaction to protectionist provisions in President Barack Obama's stimulus bill.

"The U.S. protectionist policy is hurting Canadian firms, costing Canadian jobs and damaging Canadian efforts to grow our economy in the midst of a worldwide recession," said Perrault. "A solution is urgently needed. Jobs are on the line."

Obama's administration introduced the "Buy American" policy in the nearly 800-billion-dollar stimulus package adopted earlier this year, which requires projects funded with stimulus money to use only US-made steel, iron and manufactured goods.

"Buy American" supporters in the U.S. want to make sure that the billions of U.S. taxpayer dollars being spent will revive the economy and create jobs at home.

But the provision has angered international governments who accuse the U.S. of preaching free trade while practicing stealth protectionism.

Canada and the U.S. share the largest trading relationship in the world. More than 70 percent of Canada's exports go to the United States.

Since the "Buy American" provisions were introduced, Canadian companies have said they have been facing increasing difficulties in winning government contracts in U.S states and cities.

Clark Somerville, an Ontario mayor, said its council passed a new procurement policy two weeks ago that prohibits American bids on local work after companies complained they were being shut out of American markets.

The head of the Federation said the delegates hope the resolution, that will not take effect for 120 days, will help strengthen Prime Minister Stephen Harper's case as he lobbies the U.S. for relief from the "Buy American" provision.

Perrault said the Federation and Canadian provinces are also pushing for a fair trade agreement between Canada and the U.S. that would protect jobs and industries on both sides of the border.