OTTAWA -- Fears escalated in Libya on Tuesday over caches of unsecured weapons of mass destruction that could fall into the hands of terrorists.

"This country is armed to the hilt," Foreign Affairs Minister John Baird said in Tripoli after announcing his government's $10-million contribution to the National Transitional Council (NTC) to help the fledgling government round up weapons and help remove and disarm others -- remnants of the bloody civil war between rebels and troops loyal to Moammar Gadhafi, the deposed dictator nobody can find.

"The security situation in Libya is still quite volatile and the risk of these items falling into the wrong hands or injuring civilians is real," Baird said.

Officials estimate there are 23,000 shoulder-to-air missile launchers in circulation, discarded rifles and other guns and stockpiles of chemical weapons.

Canada's contribution is part of a global effort to neutralize the caches. The U.S. has also contributed $10 million to help prevent what U.S. Sen. Barbara Boxer said would be America's "worst nightmare" -- terrorists getting their hands on the rocket launchers.

Baird was given a tour of some of the devastation caused by NATO bombing raids, including a visit to Gadhafi's sprawling compound -- now a mess of twisted steel, rubble, bullet-riddled walls and charred vehicles. He posed for photos with youth and handed out Canadian flag pins while celebratory gunfire erupted in the distance.

Key players in Canada's infrastructure technology and natural resources sectors and non-governmental organizations joined Baird on his trip. They hope to help with Libya's reconstruction.

Baird also raised the Maple Leaf to help reopen the Canadian Embassy.

He said he is prepared to declare Libya liberated once the key Gadhafi stronghold of Sirte falls.

He also discussed the role women must play in the country's reconstruction.

Parliament voted last week to extend Canada's NATO commitment in Libya for another three months.