WHISTLER, B.C. - A trade war between Canada and the United States over "Buy American" policies would hurt both countries, Liberal Leader Michael Ignatieff said Sunday, a day after Canadian municipalities passed a resolution that could shut out U.S. bidders from city contracts.

The Liberal leader was in Whistler, B.C., for the annual general meeting of the Federation of Canadian Municipalities, which narrowly passed a motion on Saturday to bar bids from companies whose countries impose trade restrictions with Canada.

Ignatieff said he's not in favour of retaliatory action to shut American companies out of the multibillion-dollar municipal and provincial procurement market, but he blamed Prime Minister Stephen Harper for leaving municipalities with little choice but to react.

"A war over access to procurement at the state and local government level on both sides of the border is bad for Canada and bad for the United States," said Ignatieff.

"Where was Harper? Where was the prime minister of Canada? We have been blindsided by this. The prime minister of Canada's got to get on the phone . . . and get (American states) to understand how damaging this is."

Ignatieff said it will be difficult to prevent back-and-forth retaliation if Canada doesn't get some kind of concession from the current American policy, which has already affected dozens of Canadian business that normally do business with the U.S.

"We've got a multibillion-dollar provincial and local procurement market in Canada. Americans have had access to the market. It has been good for American business," he said.

"If they start shutting down their procurement markets in state and local government, there are bound to be consequences."

Municipalities are clearly concerned about the impact of a retaliatory policy, as well, voting to hold off on any action for 120 days.

Some delegates at the conference said they hoped the message the resolution sends would be enough to prompt action.

Ignatieff also listed off a number of policies that a Liberal government would adopt if he becomes prime minister, hitting on every hot-button issue of a five-day conference that attracted about 2,500 people from across the country.

He repeatedly accused the Conservative government of failing to take cities seriously or treat them as worthy of attention, and promised that cities would be equal partners with the provinces and Ottawa under a Liberal government.

"You should never be treated as whiners and pothole-fillers, because you are the first responders of Confederation," he said. "We have to give municipal governments a seat at the table."

Ignatieff said he would give Canadian cities a bigger share of the tax dollar to help pay for the major services their residents are demanding for housing, transit and infrastructure. He said he couldn't offer details until he has a clear picture of the country's finances.

He blamed the Conservative government for promising to help municipalities and the economy with infrastructure money and then not coming through with it in time to fund most projects for this summer.

"We are about to miss an entire construction season," he said. "Why didn't the government listen to the people in this room?"

Ignatieff promised Liberal efforts to fight the deficit would not mean the kind of downloading to cities that the Liberal government created in the 1990s during its deficit fight.

He also said he would bring back a national affordable-housing program, something the Liberals got rid of in 1994 as they were deficit-busting. That was a move many have seen as the genesis of the country's current homelessness epidemic.

"When we were cleaning house, we threw out bits of valuable furniture," he said. "It was a mistake."

And he repeated his plans to create a single national standard for Canada's employment-insurance program, instead of the current regime of 58 different standards across the country - a proposal federation delegates supported in a vote at the convention.

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