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Merkel arrives flanked by German business leaders

Companies meet behind scenes of official summit
German Chancellor Angela Merkel arrives at the Canada Reception Centre in Ottawa on Wednesday.

As German Chancellor Angela Merkel and Stephen Harper kicked off their two-day visit at the prime minister's retreat Wednesday night, a German warship-builder and a Canadian defence contractor were among 10 companies poised for talks of their own.

The chief executives of Germany's ThyssenKrupp Marine Systems and Canada's CAE Inc., which manufactures defence simulators, are among the 10 that will attend a Parliament Hill business luncheon with Merkel and Harper today.

Merkel's visit is being billed as a chance for two established Western leaders to discuss, face-to-face, the weighty economic and political issues of the day.

But a mini-trade mission is shaping up as a major component of the German leader's two-day visit.

Merkel arrived with five major German business leaders in tow. They will be joined by five Canadian counterparts at today's luncheon. All of them remained in Ottawa Wednesday night as Merkel and Harper met for an informal two-hour conversation over dinner at the prime minister's Harrington Lake retreat, a halfhour drive across the Quebec border.

ThyssenKrupp Marine is under contract with National Defence for help in the construction of the Canadian navy's new supply ships. A German design based on the existing Berlin-class support ships is considered among the leading contenders.

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 glitchplagued, British-built Victoria-class submarines.

Appearing before a Senate defence committee a few months ago, the head of the Royal Canadian Navy said defence planners had begun to consider timelines for replacing the submarines, which is expected to take more than a decade.

The German contingent includes 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.

"When the chancellor travels, she likes to have business people around to give them an opportunity to meet and mingle with counterparts in the host country," said a senior German official.

The Canadian side will also include the CEO of CGI Group, the consultancy that includes retired army general Andrew Leslie, whose name has been mentioned by the Ottawa rumour mill as a candidate for Canada's new defence chief.

The CEOs of Research in Motion and information management company OpenText Corp. round out the Canadian group.

The most lucrative pairing at today's lunch could be the ThyssenKrupp-CAE matchup.

Construction of the navy's new supply ship project, known as Joint Support Ships, is still in the planning stages. It is expected to be built by Seaspan Marine Corp. in Vancouver.

Merkel and Harper will have a rare, uninterrupted session - no aides, no agenda - that is set for two hours, but could last longer. A more formal meeting is to be held today in Harper's Parliament Hill office.

Among other things, Harper will be keen for an update on the European economic situation.

On Wednesday, Finance Minister Jim Flaherty repeated Canada's familiar lament that Europe's own efforts to contain its financial woes are falling short.

"Not enough has been done," Flaherty said. "They need to do much more."

Merkel's visit follows Canada's refusal to contribute to a global bailout package through the International Monetary Fund.

The Conservatives have been adamant that Canada will not contribute.

Flaherty reiterated that position Wednesday, but he also showed frustration with the Europeans for not taking what he said are clear steps to remedy their economic problems.

"My European colleagues and I speak, and I know them all well," he said. "It really is up to them to deal with this issue. This is a European issue.

"Just as I would not expect them to try to indicate to me how we should deal with the Bank of Canada, or how we should deal with our own issues here in Canada, similarly it's up to them to deal with those issues."

Merkel and Harper are expected to discuss Canada's bid for a freetrade pact with the European Union.

But while Germany wants the talks to succeed, officials say Merkel will avoid any enthusiastic statements of support as the negotiations enter the home stretch.

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