Flap over US-produced steel casts shadow over Alaska ferry project on Canadian soil

A U.S. requirement that American steel be used to update an Alaska ferry terminal is causing some tension with Canadian officials.

The terminal is on Canadian soil, in British Columbia, but the land is leased to the state of Alaska.

Under a 50-year lease signed last year, the state is to rebuild the terminal facilities and docking structure on that land.

Most of the construction funding would come from the Federal Highway Administration, which has "Buy America" requirements for steel, iron and manufactured products used in projects it funds. The rest of the funding would come from the state.

The Canadian ambassador to the U.S. says requiring the steel for the project to be produced in America is unacceptable. Alaska Gov. Bill Walker has pledged to work toward a solution that benefits both sides.