It was during a secret meeting in Paris this September that Canada realized there was little room for a compromise that would enable its Afghanistan-bound troops to keep using a covert military base near Dubai.
The Canadian government is now preparing to relocate forces from the United Arab Emirates to somewhere such as Cyprus rather than give in to what it considers unreasonable demands from the host country.
The prospect of a time-consuming move to a potentially costlier and more distant staging location has Defence officials angry and frustrated. The Forces are already engrossed in complicated logistical preparations to withdraw from Afghanistan next year.
In a remarkably blunt diplomatic gambit, the UAE has been threatening to evict Canada from Camp Mirage if the Harper government doesn't grant its two commercial airlines lucrative additional landing rights at airports in Toronto and other cities, sources familiar with the negotiations say.
Trouble has been brewing for months, and contingency plans were already in the works when officials from the Canadian government - including the Department of Foreign Affairs and International Trade - met with UAE officials in Paris last month.
Canada's goal at the behind-the-scenes-talks was to explore the idea of a compromise, to see whether the UAE could be persuaded to put some water in its wine. International air negotiations are usually made public, but these discussions were not.
UAE and its state-owned carriers, including Emirates Airline, have been seeking dozens of new landing slots in Canada in return for letting the Canadian Forces stay in Camp Mirage. Air Canada and Transport Canada oppose the idea of linking air negotiations to geopolitics, though. The fear is that UAE is more interested in stealing lucrative international traffic from Air Canada to cities such as Frankfurt than simply flying more customers to its domestic airports.
Canada wasn't prepared to give much ground under the circumstances. And neither were UAE officials, it turned out.
A federal government source said there was a " huge gap" between the number of new landing spots the UAE wanted and the number Canada was willing to give.
The meeting confirmed for Canada that the UAE was not willing to consider alternatives to what they wanted, the source said.
"It ended with nothing."
The Harper government had nothing to say officially on the future of Camp Mirage on Thursday, even though sources inside and outside Ottawa said the UAE has sent Canada official notice to vacate it within 30 days.
Officials say the Canadians ramped up plans for a move after the Paris meeting and are eyeing Cyprus as an alternative staging ground. Cargo pallets from Canada might be routed through a German base.
There's still time for a compromise, but it's not clear how much good will exists for one.
The UAE government vented its frustration in a statement on Thursday, warning that failure to reach a deal on more landing rights will hurt both countries, saying six flights a week for its carriers are insufficient.
"It is unfortunate that this process has been so protracted and frustrating," UAE Ambassador Mohammed Abdullah Al-Ghafli said.
"The UAE entered negotiations in good faith on the understanding that a solution would be reached and that constructive ideas would be brought to the negotiating table. The fact that this has not come about will only negatively impact the populations and economies of both countries."
Catherine Loubier, director of communications for Foreign Affairs Minister Lawrence Cannon, would say only that the Canada-UAE relationship is strong and mutually beneficial.
"The government of Canada is fully capable of supporting our military commitments in Afghanistan, and we choose arrangements that are in the best interests of Canada."
Both Dubai-based Emirates Airline and Abu Dhabi-based Etihad Airways want greater access to Canada.
In June, 2009, Emirates introduced the 489-seat Airbus A380 double-decker jet to its Toronto-Dubai route, saying the larger aircraft was needed to meet high demand.
Air Canada says that Emirates isn't really interested in transporting customers between Dubai and Canada, accusing the foreign carrier of plotting to steal international traffic with Dubai as a stopover, not as a destination.
"Our position is that the UAE, under the current bilateral agreement, has enough capacity to serve the size of the local market," Air Canada chief commercial officer Ben Smith said Thursday.Report Typo/Error