Prime Minister Jean Chrétien says U.S. President George W. Bush has assured him that, contrary to media reports, Canada will not be left out of lucrative reconstruction contracts in Iraq.
The Prime Minister, speaking to reporters on his last official day in office before Paul Martin takes over, said Mr. Bush had telephoned him in the morning to congratulate him on his 40 years in office and that was when Mr. Bush made the promise.
"I had a discussion with Mr. Bush who called me at 7:40 [a.m. EST] to wish me good luck, and we discussed the relations between the two countries.
"He thanked me for what we're doing in Afghanistan and the offer of money for the reconstruction of Iraq [Canada has put forward $300-million], and he told me that the mention of Canada in some press that we were to be excluded from economic activities in Iraq was not appropriate, and he was telling me basically not to worry," Mr. Chrétien said.
The President was commenting on a Pentagon decision limiting lucrative reconstruction contracts to countries that supported the U.S.-led war on Iraq, the Prime Minister said.
Mr. Chrétien also said the two discussed bilateral relations. For example, he said, the softwood lumber dispute is on the brink of being resolved.
"I thanked him and we left our conversation. We are still good friends."
Mr. Chrétien's comments were in stark contrast to reports earlier in the week that Canada and other countries were being ostracized for their decision to stay out of the war in Iraq.
And it was still unclear on Thursday exactly what Washington's position was.
Mr. Bush told reporters in Washington that countries which sent troops to Iraq should share in the American-financed reconstruction projects while other nations are shut out.
"What I'm saying is, in the expenditure of the taxpayers' money...the U.S. people, the taxpayers, understand why it makes sense for countries that risked lives to participate in the contracts in Iraq. It's very simple. Our people risked their lives, friendly coalition folks risked their lives and therefore the contracting is going to reflect that."
Presidential spokesman Scott McLellan later said: "We'll be glad to discuss the issue with you," when asked about Canada's status.
On Wednesday, the U.S. government defended its decision to restrict contracts to the 63 countries on the list — they range from Albania to Uzbekistan, including major allies such as Britain but also obscure contributors such as Tonga — but hinted that other countries could make their way onto the list if they find ways to contribute.
Countries that were excluded — such as Germany, Russia and France — were angry, and French officials even suggested that the U.S. restrictions might violate international trade laws.
Mr. Martin, who officially takes over from Mr. Chrétien on Friday, said Wednesday that he was "disappointed" and "didn't understand the decision."
He said he would discuss the situation with Paul Cellucci, the U.S. ambassador.
The incoming prime minister said it was hard to understand why Canada would be cut out of the rebuilding contracts in Iraq after pledging millions of dollars on top of Canada's ongoing support of the war on terrorism and its contribution to reconstruction in Afghanistan.
Also Wednesday, United Nations Secretary-General Kofi Annan suggested that the exclusion of non-coalition members from the bidding threatened to drive a wedge between the United States and several countries that could be helpful in Iraq.
Few Canadian companies are large enough to handle the contracts the United States is preparing to dole out, Roger Soucy, president of Calgary-based Petroleum Services Association of Canada, said on Wednesday.
The U.S. is offering 26 prime reconstruction contracts woth $18-billion U.S.
With reports from Canadian Press, Jeff Sallot and Paul Koring
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