Canada should adopt a "Buy Canadian" strategy in response to the "Buy American" clause included in the proposed U.S. stimulus package, NDP Leader Jack Layton urged Tuesday.

During question period in the House of Commons, Layton said that there's a "golden opportunity" to boost slumping domestic sales with a "perfectly legal and appropriately designed 'Buy Canadian' strategy."

"The United States has had a 'Buy American' act for 76 years," Layton said. "It's perfectly legal under the World Trade Organization, and, in fact, under NAFTA, governments are allowed to buy at home in order to use taxpayers' money to create jobs for workers and to support communities and their industries.

"Mexico, China, Japan, South Korea, they all have national procurement policies, and it would be a good idea for Canada. Can the prime minister tell us what's wrong with a 'Buy Canadian' policy as permitted under continental and global trade rules?"

The controversial provision, part of the $819-billion US financial stimulus package before the U.S. Congress, would require all public works projects funded by the stimulus package to use only U.S.-made iron and steel.

During question period, Prime Minister Stephen Harper shot back that the specific proposals before the U.S. Congress violate trade obligations and that Layton is suggesting the government respond by starting a trade war with the U.S.

"That is not advice that we will be taking," Harper said.

The Tory government has called on Congress to remove the controversial clause in the stimulus package. In a letter to senior U.S. Senate leaders, the Canadian ambassador in Washington, Michael Wilson, said the clause could spark protectionist measures in other countries.

"The leader of the NDP asked the question, 'What would be wrong with policies that have us just buy here?' What's wrong with it is we are a world trading leader," Harper said. "We can compete with the best in the world; we can sell around the world. We want to sell around the world, and that's what our policy is designed to have us do."

The Democratic-controlled U.S. House of Representatives approved the economic stimulus package in a vote last week, and the Senate began debating it on Monday.