Commenting on the commercial spat-turned diplomatic row, former transport minister John Baird said: "We had negotiations with the United Arab Emirates. The offer that was on the table was not in the best interest of Canada.

"It would have cost Canada literally tens of thousands of jobs," he told reporters. "That is why we said no."

Canada was forced last month to close a military base in Dubai that was part of a key supply route to Afghanistan after refusing to grant the UAE's two national carriers, Emirates Airlines and Etihad Airways, more landing rights.

The stand-off grew even more personal after the UAE forced a plane carrying Defence Minister Peter MacKay back from Afghanistan to take a long detour by denying the aircraft permission to use its airspace.

It also revealed divisions within Canadian Prime Minister Stephen Harper's Conservative caucus when MacKay, sporting a "Fly Emirates" cap, was overheard this week criticizing Baird over the affair.

Baird reportedly lobbied against granting UAE carriers extra landing rights.

On Wednesday, MacKay told a Conservative senator: "Canada could have continued to use the military base in the UAE for free... if only it had granted those slots," according to an Astral Radio reporter who blogged about the private conversation he said he witnessed.

MacKay also reportedly suggested it would take 10 years to repair the relationship with the UAE.

About 27,000 Canadians live in the United Arab Emirates, one of Canada's biggest economic partners in the Middle East, with bilateral trade valued at about 1.5 billion dollars per year, according to UAE officials.

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