Confirmation yesterday that America's case of mad cow disease has a Canadian connection spells more uncertainty for Ontario's $1-billion beef industry, observers warn. "It is the uncertainty that is tough. You just don't know what will be the next move," said Jim Clarke, manager of the Ontario Cattle Feeders Association.

Clarke said Ontario farmers have struggled to stay optimistic since the mad cow case in Alberta last year crashed that province's cattle market.

The fallout dominoed across Canada, as the U.S. shut its border to Canadian beef.

Producers have been especially hard hit in Southwestern Ontario, home to more than half the province's beef .

With the prospect the U.S. would relax its restrictions on Canadian beef, the outlook was just starting to brighten.

Now DNA testing of the U.S. mad cow found in Washington state confirms it was born in Alberta, a big question mark hangs over the industry again.

"It is really starting to hit financially," said Clarke, a London-area beef producer.

Ontario is Canada's third- largest beef producer. Most of the country's beef is traditionally exported to the U.S.

Clarke said he's still hopeful the U.S. border will reopen to Canadian cattle despite the Alberta connection, an optimism shared by others in Ontario's livestock industry.

"There was really no surprise here," said Mike McMorris, executive director of the Ontario Cattlemen's Association.

McMorris said because the U.S. has already adopted precautions Canada has taken to prevent mad cow disease, there's no reason for the border to remain closed now.

"I am quite optimistic that they will live true to their word that science rules and open the border," he said.

Canadian Agriculture Minister Bob Speller yesterday said he will meet his U.S. counterpart Jan. 16 to discuss the situation.

He will also lead a trade mission to Japan, South Korea and Mexico to urge those countries to allow imports of Canadian beef.

Prime Minister Paul Martin said he will press for the reopening of the American market to Canadian beef when he meets next week with President George W. Bush at a summit in Mexico.

"The problems that have to be dealt with are the same on both sides of the border," Martin said yesterday in Nova Scotia.

"Canada has acted very quickly, has taken very significant action, has, in fact, paved the way and that has to be recognized."

Confirmation of the cow's origin triggered frustration in the beef industry, but officials said the country's status as being at minimal risk of mad cow disease, or bovine spongiform encephalopathy (BSE), should not be affected.

Speller agreed.

"The latest finding of an infected cow with BSE does not change our assessment of the situation in North America with respect to the safety of the food supply."

Still, the government is introducing increased surveillance and tracking to further reduce the risk of mad cow.

Speller spoke moments after it was revealed DNA tests in Canada and the U.S. confirmed a Washington state Holstein that tested positive for mad cow was born on an Alberta ranch.

Speller said he obtained cabinet funding yesterday for a package of anti-BSE measures already underway. He did not give a dollar amount.

Brian Evans, chief veterinarian of the Canadian Food Inspection Agency, said the goal is to be able to detect a one-in-a-million case of mad cow.

That will involve upgrading laboratories and training personnel to administer quick tests. This year Canada tested about 5,500 cattle for BSE and the number is expected to rise, Evans said.

He said the DNA tests are just one part of a sweeping investigation that will include tracing the feed that likely infected the cow.

Evans said the new case of BSE will have a psychological impact: "It certainly does provide some disappointment to the industry."

The origin of the feed, which could have come from several sources, is still not known.

Results of the tests announced yesterday had been highly anticipated since U.S. officials revealed the country's first mad cow case Dec. 23.

Days later, officials tentatively pegged the cow's birthplace and birthdate of April 1997, four months before safety restrictions on cattle feed were adopted.

Ron DeHaven, chief veterinarian for the U.S. Agriculture Department, also maintained the beef supply is safe "whether this cow originated in Canada or not."

Many in the industry say the cow's origin doesn't matter because the Canadian and U.S. cattle and feed sectors are so integrated after decades of heavy trade. For example, the bull that sired the infected cow was American.