Canadian labour groups are urging provincial governments to reject a deal that would temporarily exempt the country's firms from the U.S. "Buy American" policy — warning Canadians would lose more than they gained.

Last week, federal government officials managed to convince U.S. legislators to amend their controversial "Buy American" program to allow Canadian firms access to bid on potentially lucrative stimulus projects.

Officials within U.S. President Barack Obama's administration have approved a pact that would exempt Canadian firms from some of the controversial "Buy American" legislation. (Associated Press)

The federal government trumpeted the deal as a major win, but the labour groups — in releasing a leaked version of the agreement at a news conference at the Ontario legislature on Thursday — condemned the plan.

"This is a deal under which we give and they take," international trade lawyer Steven Shrybman told journalists at a news conference at Queens Park in Toronto.

In particular, the Ontario wing of the Canadian Union of Public Employees (CUPE) and the Council of Canadians criticize the deal for giving permanent and unrestricted foreign access to publicly funded contracts that supply schools, universities, social services and hospitals.

The labour groups warn that, if approved by the provinces, the deal would be the first time Canadian governments agreed to open their procurement contracts to bids by other World Trade Organization members since the landmark Canada-U.S. free trade deal of 1988.

'This is a deal under which we give and they take.'—Steven Shrybman, trade lawyer

Ontario and the other provincial governments have until Friday to peruse the pact and suggest amendments. After that, the Canadian and U.S. governments will present the proposal to the WTO for formal approval, and the plan will be enacted as early as next Tuesday, citizen's advocacy group the Council of Canadians said.

"This is not a small step for the provinces to take, and the benefits have been overstated," the group's trade campaigner Stuart Trew said.

"The scope and drawbacks go much further than what Canadians have been told."

The groups also take issue with the fact that the vast majority of the U.S. government's emergency stimulus dollars have already been spent.

"We're talking about at most, access to $4 or $5 billion over the next 16 months," Shrybman said.

"In return for that, we've made a commitment to open procurement contracts not just by federal agencies but by provinces and municipalities, forever," he said.

"We've thrown the door open. We are gaining nothing in return, as the U.S. hasn't opened its own market one bit — never mind permanently."

Bottle bans, fair wage policies would be illegal: CUPE

Only a few agencies in Ontario would be exempt from the deal, including Metrolinx, Ontario Power Generation and the Ontario Power Authority, Infrastructure Ontario and Waterfront Toronto.

CUPE says local commitments such as bottled water bans, local food procurement policies and fair wage polices would be made illegal under the deal.

Fred Hahn, president of the Canadian Union of Public Employees Ontario, says the deal gives away far too much in return for far too little.

"This deal would limit the power of the provincial government to harness all the possible economic levers at its disposal to deal with the economic crisis," Hahn said in a release.

"The race to sell off or give away our province needs to end and the premier should not sign this deal."

Speaking at the International Auto Show in Toronto on Thursday, Federal Industry Minister Tony Clement dismissed the proposal's critics, calling it a "precedent-setting deal".

"It confirms we're important to U.S. trade that we shouldn't have these punitive sanctions," he said. In addition to Washington and Ottawa, 37 U.S. states have already signed off on the deal, he noted, so he urged Ontario and other provinces to do the same.

"We've set the precedent that we are special, we are important, and I believe that precedent will stand," he said.