* Canada not keen to fix price of oil-Cannon
* Canada opposes long-term fiscal deficits
* Italy's Lecce Framework not a given to be adopted-Cannon
NEW YORK, June 30 (Reuters) - Canada may not embrace an expected proposal by French President Nicolas Sarkozy to work out a fair oil price accord at next week's G8 summit in Italy, Canadian Foreign Minister Lawrence Cannon said on Tuesday.
He also signaled that fellow members of the Group of Eight leading industrialized nations should be careful about staying in deficit over the long term.
Sarkozy said last month he wanted oil producers and consumers to agree to oil price regulation, and a French government source said on Monday that Paris would ask the G8 to discuss this at the July 8-10 summit in L'Aquila.
"We'll have to look at the proposal when it is put forward by President Sarkozy," Cannon told Reuters in a telephone interview in New York after speaking at the U.N. Security Council about Afghanistan.
"But pegging the price of oil doesn't seem to be the best interest of everybody ... We believe in a free market economy," he added.
G8 leaders are also expected to discuss the consequences of massive public spending to boost economies battered by recession and the worst financial crisis in decades.
Cannon said Canada would hold up its own fiscal performance as an example for other G8 economies. It is running a deficit of 3.3 percent of gross domestic product this year, but says it will be able to return to surplus by 2013-14.
"In Canada, we're against structural deficit funding. We're doing our share ... Any government that commits to a long-term engagement in indebting itself is actually hurting itself if they do so," the minister said.
"Certainly the prime minister will take to the table the host of projects that we've put forward and use that as the example of Canada's commitment of getting everyone out of the global recession," he added.
Italian Prime Minister Silvio Berlusconi, the G8 host, has also proposed a new legal standard of good conduct for business and finance to avoid future global financial meltdowns.
But his proposed "Lecce framework" risks being seen as a compendium of existing and voluntary standards that would need vigorous enforcement in order to be effective, and Cannon would not give it Canada's automatic backing.
"I can't assume that (agreement on the Lecce framework) as a given," Cannon said. "Of course Canada will look at all the initiatives that all of the leaders put forward. I know that our political officials are looking at that as we speak and we'll see where this is going to end up. It's very early in the discussion."