German Chancellor Angela Merkel is touting Canada as an example for Europe in how to emerge from its economic crisis in a robust way and reiterating Germany's support for a Canada-European Union free trade deal.

Speaking to reporters on Parliament Hill at the conclusion of her bilateral talks with Prime Minister Stephen Harper, the German leader said that Canada has "weathered the economic crisis quite well," noting particularly its sound budgetary policy and strict rules for the banking sector.

Both leaders used their statements to voice support for the trade negotiations that are scheduled to conclude by the end of the year. Merkel pledged to do what she could upon her return to seek a speedy conclusion.

"We — Canada and Germany — are convinced that free trade is one of the best engines of growth that we can have," Merkel said in German. "Protectionism is one of the greatest dangers."

Work began towards an agreement when Germany held the European Union presidency in 2007.

The German Chancellor said she'd like to see an agreement on the "broadest possible base," including provisions to recognize professional qualifications, harmonize regulations and reduce tariffs.

Harper thanked her for her support and called her contribution "vital" to Canada's "historic agreement" with the largest consumer market in the world.

"We have a goal of having an ambitious agreement that will not only set a high standard for agreements between major economies going forward but will also provide a signal to the global economy that major developed countries are able to move forward on a trade agenda," Harper said.

Any deal reached would need to pass the European Parliament, and there's no guarantee it would be ratified.

Harper declines comment on debt crisis

Neither Merkel nor Harper offered great detail on the advice that may have been shared as Merkel prepares to return to the heart of the European debt crisis.

Harper said Europe had taken a number of important steps and that additional things need to be done, but he declined to comment publicly on how well European leaders were addressing the issues before them.

Merkel said that Canada was not counselling something that it wasn't doing at home.

"Quite the contrary, it's tested and proven, and that's important to me," Merkel said in German. 

She noted Europe's need to regain its credibility with foreign investors after failing to live up to things it said it would do.

Canada is not contributing to an International Monetary Fund package designed to help support struggling European economies.

Harper said there was no connection between discussions around the trade negotiations and the IMF package.

"We have complete confidence in the ability of our European friends," Harper said. "They have the means and the will to address their issues."

Merkel didn't criticize publicly this decision, but noted the IMF's important advisory role and Canada's participation on its board "exerting its influence this way."

"The question is how can we create more growth for the eurozone," Merkel said in German, noting that it would be a "great disservice" not to support trade as a potential remedy for Europe's sagging economy.

The German leader said she discussed Alberta's oilsands with Harper in the context of the European fuel directive, which Canada opposes. Merkel said both leaders agreed that a scientific approach is required when evaluating carbon emissions.

"We need to do everything we can to reduce CO2 emissions as best we can," Merkel said in German, "but we are also aware of the problems that are there with respect to the oilsands."

Merkel noted that she's aware that other forms of resource extraction also create carbon emissions. "One has to give a solid scientific foundation to this," she said.

Official visit includes trade mission

Merkel's morning began with a courtesy call to Rideau Hall, where she met briefly with Gov. Gen. David Johnston.

Once on Parliament Hill she was feted with all the ceremonial trappings of an official welcome: inspection of a military honour guard, greetings from Parliamentary officers including Senate Speaker Noël Kinsella and the signing of Canada's official guest book for visiting dignitaries.

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Governor General David Johnston met with German Chancellor Angela Merkel at Rideau Hall earlier Thursday morning. (Patrick Doyle/Canadian Press)

On Wednesday evening, Merkel and Harper enjoyed a three-hour casual dinner and conversation at the prime minister's country residence at Harrington Lake in Quebec. 

The leaders exchanged gifts to commemorate the visit: Merkel gave Harper a hockey jersey from Berlin's team, the "Eisbären" (German for polar bears), while Merkel received a canoe paddle from the Hudson’s Bay Company.

Five major German business leaders accompanied Merkel on this trip. While Harper and Merkel met privately, business delegations were holding their own discussions with Canadian officials and counterparts as part of a small trade mission.

In addition to warship builder ThyssenKrupp, the German contingent included the head of chemical giant BASF, as well as K+S Group, which broke ground in June on the $3.25 billion Legacy mine, Saskatchewan's first new potash mine in four decades.

ThyssenKrupp Marine is under contract with National Defence for help in the construction of the Canadian navy's new supply ships.  More importantly, the company is considered a leading candidate within the defence community if and when the federal government decides to replace the military's glitch-plagued, British-built Victoria-class submarines.

The German and Canadian business leaders were part of a special luncheon in honour of the German leader's visit on Parliament Hill.

Halifax stopover planned

Following the luncheon, Merkel is flying to Halifax, where she has events scheduled around  5 p.m. AT (4 p.m. ET) at Dalhousie University.

Science and Technology Minister Gary Goodyear will host Merkel on behalf of the Canadian government during the Halifax leg of her tour.

The German leader is expected to preside over the signing of a scientific research partnership deal between Canadian scientists and the German Helmholz Association of German Research Centres. Part of her visit will include a stop at Dalhousie's world-class Aquatron marine research laboratory.

The German leader was a chemist before entering politics. She was also a former environment minister under former German leader Helmut Kohl, taking a particularly keen interest in scientific research around climate change.

Merkel's entire visit will last just over 24 hours.

with files from The Canadian Press