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BANGALORE, India (Reuters) - Canada is optimistic the United States will approve TransCanada Corp's controversial Keystone XL oil pipeline, Prime Minister Stephen Harper said on Thursday.
Speaking during a visit to India, Harper said a majority of U.S. companies and unions favored the $7 billion Canada-to-Texas oil sands pipeline. President Barack Obama said in January he would postpone a decision until 2013 on whether to approve the pipeline, which has drawn fire from environmentalists.
"The president has told me several times that he hasn't yet made a decision, that he will follow the regulatory process in the United States, and evidently the next steps will be very soon, and I remain optimistic," Harper told reporters.
After the United States blocked the project in January, Harper and other officials said it underscored Canada's need to diversify oil exports to markets such as Asia.
Environmental groups loathe the idea of increasing the flow of oil sands crude from Canada because of its bigger carbon footprint in the mining process.
Harper also said Canada had contingency plans to deal with the economic fallout if the United States were to go over a so-called fiscal cliff, which refers to a package of spending cuts and tax increases due to take effect in 2013.
"The government, as best we can, does always look at contingency plans for these things," he said. "Obviously we encourage President Obama to work to bring Congress together on a resolution of this issue."
On Wednesday, Canadian policymakers warned that Canada would fall into recession if Washington does not reach a deal by year-end to avert the $600 billion tax and cuts package. Finance Minister Jim Flaherty said the Canadian government and central bank could provide extra stimulus if necessary. (Reporting By Randall Palmer; Editing by Frank Jack Daniel)