Finance Minister Jim Flaherty listens to a question at a news conference Monday in Montreal. (Graham Hughes/Canadian Press)

A vote by Canadian municipalities to retaliate against a U.S. "Buy American" policy expresses "genuine concern" about protectionism but isn't a dangerous move, says Finance Minister Jim Flaherty.

“Protectionism is bad for Canada and bad for the United States," Flaherty told reporters in Montreal on Monday. "It's bad for cities. It's bad for provinces. It's bad for American states.”

On Saturday, politicians attending the Federation of Canadian Municipalities annual meeting in Whistler, B.C., voted 189 to 175 to shut out U.S. bidders from city contracts. The nonbinding resolution would bar bids from companies whose countries impose trade restrictions against Canada.

The vote was in response to a measure included in the stimulus package passed by the U.S. Congress in February stipulating that public works projects receiving government funds should use iron, steel and other resources made in the United States.

'Genuine concern'

Still, the finance minister didn't seem concerned about the move. "I don't think it's dangerous. It's a motion at a meeting," he said.

"I think it's a genuine concern on the parts of the mayors that they want to avoid protectionism, but I think the way to do it is to work on the issues and make sure that the Americans realize — just as I hope most Canadians realize — that we actually want to trade with each other."

Trade Minister Stockwell Day said the government has called in its trade commissioners from across the U.S. to lobby congressmen personally on Capitol Hill on Tuesday.

"It's part of an action day called 'all politics is local politics' and it's getting the message across that Buy America and protections wind up hurting on both sides of the border," he said.

The government is working hard to ensure "middle echelon" officials in the United States stick to the Obama administration's opposition to protectionism and don't create new trade barriers, Flaherty said.

However, the finance minister didn't say whether he supports the measure. The issue has been discussed by G20 leaders and finance ministers twice in the past few months, he said.

With files from The Canadian Press