Canada-New buy Canadian plan.

CANADA-UNIONS GO "TIT FOR TAT" AGAINST USA PROTECTIONISM.

Two of Canada’s largest unions are urging the federal government to adopt a Buy Canadian policy to ensure that public money spent to stimulate the economy stays in this country.

A Buy American measure in the United States stimulus package has drawn criticism from major U.S. trading partners, including Canada, who argue that protectionist measures will only prolong the current recession.

But leaders of the Canadian Auto Workers and the United Steelworkers applaud the U.S. move and say Canada should follow suit.

The unions argue that the integrated nature of the two economies ensures that cross-border trade will continue. They also say trade deals, including the North American free-trade agreement (NAFTA) and those signed by members of the World Trade Organization, will shelter Canadian industry from any negative fallout.

It is not true that a Buy Canadian policy would prompt a trade war, CAW president Ken Lewenza said during a news conference yesterday.

"These arguments are completely false, raised as a smokescreen by those clinging to the rapidly failing ideology of endless free trade and deregulation - the very ideas that got us in this mess today," he said.

The CAW’s demand for a Buy Canadian policy will not get much of a hearing from Ottawa. Ted Menzies, the parliamentary secretary for Finance, said yesterday that the Conservative government opposes protectionism.

"History tells us it’s not helpful for anybody," Mr. Menzies said. "We’ve met with our G20 partners, our G7 partners - they all agreed. And we have an upcoming G7 meeting that I am sure will reaffirm that protectionism is not the way out of this global crisis."

But Mr. Lewenza said it is wrong to use tax dollars to support jobs in other countries "at a time when this country is bleeding manufacturing jobs."

His union, he said, has had to fight to ensure that Toronto’s subway cars were made in Canada instead of China. He also pointed to buses that York Region, north of Toronto, has bought from Belgium, German ferries purchased by British Columbia and subway cars in Vancouver that were made in South Korea.

"Every year more than $500-billion is spent by governments at all levels in this country, and yet, year in and year out, billions and billions are spent on goods and services from other countries when they could have sourced from Canada," Mr. Lewenza said.

Ken Newman, national director of the USW, said his union sees "an added benefit" in the Buy American initiative for both the U.S. and Canada.

The U.S. has had a Buy American policy in effect since 1933, but Canada has not been affected, Mr. Newman said. Canada’s trade with the U.S. "is protected by the trade agreements and it is protected by the WTO."

Critics point out, however, that WTO and NAFTA procurement provisions do not apply to a wide range of state and local purchases. And because cities and states will spend much of the federal cash for roads, bridges and schools, they say some may argue those trade treaties don’t apply.