Canadian companies are now exempt from controversial Buy American provisions introduced by Washington in the wake of the recession, under a new deal that International Trade Minister Peter Van Loan has confirmed.

Van Loan announced Friday morning that, across 37 U.S. states, Canadian companies will be able to participate in state and local public works projects funded by the US$787 billion American Recovery and Reinvestment Act.

In return, Canada will give U.S. suppliers from those states the opportunity to compete for municipal and provincial-level contracts north of the border.

"With this agreement, we are sending a clear message: the best way to create and keep jobs is by opening economic opportunities, not by closing them," Van Loan told a news conference in Ottawa.

"Canadian suppliers will have guaranteed access to sub-federal procurement in a range of American states and U.S. suppliers will enjoy the same guaranteed access to provincial procurement."

But the deal comes near the fast-approaching Feb. 17 deadline for accessing cash under the rules of the American Recovery and Reinvestment Act.

Canadian officials insist that much of the U.S. stimulus money is yet to be spent and that deadline is likely to be extended.

However, Scott Brison, the Liberal party's international trade critic, said the deal came too late and expressed skepticism that many opportunities are left with regard to the U.S. stimulus program.

"The fact is much of the stimulus has been spent and the rest will be expiring soon," Brison told reporters Friday morning.

"The government has failed to negotiate a good agreement in a timely manner. As a result, Canadian jobs have been lost and Canadian competitiveness has been affected negatively."

Perrin Beatty, the president and CEO of the Canadian Chamber of Commerce, said the agreement "puts Canadian companies in a better position to benefit from remaining U.S. infrastructure stimulus funding."

Lawrence Herman, a Toronto-based international trade lawyer, was cautiously optimistic about the agreement.

"At the end of the day, this is access to bidding opportunities," Herman said on CTV's Power Play. "That's important for Canada and that's important for the Americans."

"But we don't have all the details," he added. "We don't know how comprehensive this arrangement is going to be, what's covered, what's in and what's out."

Van Loan said Ottawa will keep pushing for a permanent exemption from any Buy American provisions and for establishing a fast-track process to deal with any future trade irritants.

Background on Buy American

The agreement comes after a months-long dispute has simmered between Ottawa and Washington since the U.S. Congress put the protectionist measures into the U.S. stimulus package last year.

Canada had long argued that the Buy American provisions were hurting businesses on both sides of the border. The U.S. Chamber of Commerce and several blue-chip American corporations also opposed the move.

"Every step of the way, our negotiations were guided by the great spirit of co-operation and partnership that has marked the Canadian-U.S. relationship over the years," Van Loan said.

"It's clear that our trade and our investment relationship is essential to businesses, communities and people in both countries. We're one another's top export partner, and the deep integration of our markets makes us both more competitive globally."

The deal announced Friday ensures that "secure, profitable and predictable access to each other's marketplace remains a cornerstone of our trade relationship," the minister added.

With files from The Canadian Press