Canada has said no to the U.S. missile defence program, Prime Minister Paul Martin announced Thursday.

The prime minister said the decision was made following extensive discussions with Foreign Affairs and National Defence.

"Let me be clear: we respect the right of the United States to defend itself and its people," said Martin.

Canada will continue to work with the U.S. for the common defence of North America, but our efforts won't be concentrated on missile defence, the prime minister said.

"Canada remains steadfast in its support of Norad," said Martin.

The nearly $13 billion allocated for the military in Wednesday's budget proves Canada is committed to taking its share of responsibility for national and international security, he said.

The outgoing U.S. ambassador to Canada reacted swiftly, saying the decision to defend North America now rests with Washington.

"We simply cannot understand why Canada would in effect give up its sovereignty – its seat at the table – to decide what to do about a missile that might be coming towards Canada," said Paul Cellucci.

Earlier, Foreign Affairs Minister Pierre Pettigrew told the House of Commons about the prime minister's decision, which Pettigrew said was based on policy, and not emotion.

Pettigrew said he informed U.S. Secretary of State Condoleezza Rice of Canada's decision on Tuesday during NATO meetings in Brussels.

"Of course, the U.S. is disappointed. They recognize and respect our decision," said Pettigrew.

While NDP foreign affairs critic Alexa McDonough praised the decision, party leader Jack Layton criticized the prime minister for telling the American secretary of state before informing MPs.

When asked Wednesday during Question Period whether he was planning to reject missile defence, Martin suggested the decision hadn't been made.

"The government has stated all along that it will make the decision when it is in Canada's interest to do so," said Martin.

The issue was thrust into the spotlight earlier this week when Canada's new ambassador to Washington, Frank McKenna, said Canada is effectively already taking part in the program by allowing the missile program to use Norad.

During a visit to Canada in December, U.S. President George W. Bush publicly urged Martin to join the program.

When he first took office, Martin suggested he supported joining the plan, saying he believed Canada should be at the table when it comes to any discussion of the defence of North America.

Critics of the program say it could lead to a new arms race and the weaponization of space.