Canada-U.A.E. relations need work: MacKay

Defence Minister Peter MacKay said Thursday thatCanada has "work to do"to repair its relationship with the United Arab Emirates.

Diplomatic relations between the two countries soured after Canada deniedincreased landing rights for two state-run airlines from the U.A.E.

In retaliation, the U.A.E. barred Canada's access to Camp Mirage, a covert military base it has been using to stage operations in Afghanistan.

"We have some work to do in repairing the relationship with the [U.A.E.],"MacKay said. "Clearly the circumstances under which we left the base require now some work."

He did not deny that the relationship had soured unnecessarily.

Canada refused to grantthe landing rights because the U.A.E. tried to "blackmail" it into doing so by using access to the key Dubai military base as a bargaining chip, Conservative sources told CBC News in October.

On Oct. 11, MacKay confirmed that talks with the U.A.E. about the base had failed, and Canada would abide by the country's wishes and vacate it.

Canada has since made arrangements to use alternative bases in Germany and Cyprus.

Reports suggest it will cost $300 million to close Camp Mirage.

The federal government hasn't "calculated all the costs" yet, MacKay said before boardinga flight to Lisbon for a NATO summit.

"Obviously, we'll look at close-out costs when the time is right. We have had to relocate, as you know, to other bases.

"My primary concern is that we continue to have operational efficiencies. We have to continue to supply personnel equipment going in into the Afghantheatre."

MacKay's comments came one day after he apparentlycomplained in the presence ofa radio reporter about the decision to deny the U.A.E. the extended rights, suggesting it had been a bad idea.

The reporter, NewsTalk 1010's Daniel Proussalidis, said he was standing with Finance Minister Jim Flaherty and Senator Michael Meighen during a fire alarm on Parliament Hill whenMacKaywalked upwearing a red baseball cap with the words "Fly Emirates" on it.

According to Proussalidis, MacKay said jokingly he was wearing the hat "for [government House leader John] Baird," whose opinion of the U.A.E. situation was opposite to his.

On Thursday,MacKay called that exchange a "private conversation" and refused to elaborate further.

Question period heated

In question period, Liberal MP Ralph Goodale asked why MacKay was parading around in a Fly Emirates hat when Canadalost millions in the kerfuffle.

Baird responded that the base arrangementwas not good for Canada.

Goodale said MacKay didn'tthink that, and said the issue was bungled by the Conservatives.

The wearing of the cap was an insult to soldiers in light of the operational difficulties caused by the U.A.E. issue, said NDP Leader Jack Layton.

Baird asked why the NDP was standing up for a foreign company and not union members who work for airlines in Canada.