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A coaster set is the newest addition to the memorabilia sold in a secret shop on the lower level of CSIS headquarters in Ottawa.The Canadian Press

Canadian spies who snoop on citizens' Internet and phone records without a warrant risk running afoul of the law if they do not change the way they operate, critics say.

Like police agencies at home and spy agencies abroad, the federal government's two main intelligence services are being forced to adjust to a climate of growing privacy concerns.

(How are Canada's privacy laws about to change? Read The Globe's easy explanation)

For more than a decade, these agencies – known in short as CSIS and CSEC – have been part of efforts to collect and share as much communications data as legally possible in the name of fighting terrorism.

Such alliances have led Germany's intelligence agency to press its government to "relax interpretation of the privacy laws," according to a U.S. document leaked on Wednesday.

But such leaks are also leading politicians and judges to try to apply privacy laws more rigidly. On Thursday, Liberal MP Joyce Murray tabled a private member's bill that seeks to impose greater judicial and parliamentary scrutiny on Communications Security Establishment Canada.

Currently, CSEC faces no such direct scrutiny. This spy agency operates under secret orders from the Minister of National Defence, and keeps its relationships with communications corporations murky. It is allowed to collect Internet traffic data – including some Canadian traffic – without going to court.

Critics say CSEC's legal foundations are shaky and fixes are needed. "The government has been operating on a theory that what they're collecting is something magical that doesn't attract a reasonable expectation of privacy," said Craig Forcese, a law professor at the University of Ottawa.

Secret hearings and secret authorizations have long shielded intelligence-agency practices in Canada from public view, yet new Conservative legislation and last week's Supreme Court rulings have helped bring broader issues to the fore.

Eavesdropping on Canadians' conversations without warrants remains illegal. Yet, questions arising from criminal investigations of Internet-based pedophile activity led Canada's top court to rule last week that Internet subscriber data are considered private.

In a related question, the court ruled government authorities cannot coax such records from telecommunications corporations without first getting judges to sign warrants.

Like police, officers of the Canadian Security Intelligence Service have to go through courts to get warrants to spy on communications records. Yet sometimes CSIS turns to corporations and foreign allies for help.

"Cold War-era wiretap laws compromised its ability … CSIS had to ask allies to conduct electronic surveillance on CSIS's behalf or to request that Canadian telecom companies voluntarily provide international call records," says a leaked cable sent from the Ottawa embassy to Washington.

This 2009 cable was published among 250,000 others by the WikiLeaks organization several years ago.

At that time, Federal Court judges were turning down warrant applications for new CSIS powers, as the agency sought to spy on Canadian terrorism suspects who had left Canada. (A new "extraterritorial" warrant power was eventually obtained, but last fall a judge ruled the spy agency spent years misleading the court to get it.)

A former top CSIS legal executive, now retired, suggests handovers of corporate records without a warrant are as commonplace in the intelligence world as they are for police. "I don't know why phone companies say they are reluctant to say they co-operate with law-enforcement and national security agencies," said Geoffrey O'Brian, in an interview last month.

Mr. O'Brian stressed that "any such co-operation is covered by PIPEDA and subject to review by the Privacy Commissioner."

PIPEDA is the shortened name of a law that has been invoked by government agents to facilitate handovers without warrant of records from companies to Canadian government agents for 10 years.

Yet last week the Supreme Court suggested the law has been misapplied and misinterpreted by government authorities. "I do not see how police could get a new search power through [PIPEDA]," Justice Thomas Cromwell wrote in writing for the majority.

Despite that ruling, the Conservative government says it will pass a law that would shield phone and Internet companies who "voluntarily provide" records to Canadian government authorities.

Canada's new privacy commissioner, Daniel Therrien, told The Globe this week that the Supreme Court ruling means that such warrantless exchanges will not "pass constitutional muster" in the future.

- With a report from freelancer Tim Groves

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