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Prime Minister Justin Trudeau says ransom payments are a key source of funding for terrorist groups such as Abu Sayyaf.

KENA BETANCUR/AFP/Getty Images

Prime Minister Justin Trudeau says Canada will not pay Abu Sayyaf terrorists any ransom to release remaining hostages, which leaves open the question of whether Ottawa and its allies could launch a rescue mission to free those held by the Filipino jihadis.

"I do … want to make one thing perfectly crystal clear: Canada does not and will not pay ransom to terrorists, directly or indirectly," Mr. Trudeau told reporters at the conclusion of a Liberal government cabinet retreat west of Calgary on Tuesday.

"Paying ransom for Canadians would endanger the lives of every single one of the millions of Canadians who live, work and travel around the globe every single year."

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This terrorist crisis is a test of Canada's no-ransom policy. Some European governments, such as France and Italy, are believed to have paid ransoms to terrorists to release hostages in the past.

Canadian John Ridsdel was beheaded in the southern Philippines by Abu Sayyaf, which has sworn allegiance to the Islamic State, after a ransom deadline was not met. Still alive and held by Abu Sayyaf are Canadian Robert Hall, Filipina Maritess Flor and Norwegian Kjartan Sekkingstad, whom a source said is a permanent resident of Canada.

The government was not involved in the Ridsdel family's negotiations with the terrorists, but it was aware of what was happening, a well-placed source told The Globe. The ransom demanded was dropping, but the family was still unable to raise sufficient funds.

"The government is aware that the family was negotiating with the terrorists, and they knew what the demands were, and they knew the demands were changing, but the government never got involved in these talks," the source said.

Mr. Trudeau said Canada "is determined to bring these terrorist criminals to justice" and has talked to Philippines President Benigno Aquino III, whose government is coming under pressure to free remaining hostages.

Security experts say it would be very challenging for Canada and its allies to mount a military rescue operation to free remaining hostages held by Abu Sayyaf.

Canadian Security Intelligence Service agents and RCMP officers are believed to be on the ground in the Philippines along with Canadian military personnel, and sources tell The Globe and Mail authorities are assessing the risks of a rescue operation.

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Security sources say the CIA, Australia's intelligence service and the Communications Security Establishment, which is Canada's ultrasecret signals intelligence agency, would be assisting the RCMP as the lead agency in seeking the release of the hostages.

Andy Ellis, the former assistant director of operations at CSIS and now president of Ellis Global Risk Assessment, said it would extremely difficult to detect where Abu Sayyaf is holding the hostages.

"It's naive to think that in a kind of a Hollywood way that people can be reached out and arrested. The islands that they control or have some sort of authority over are pretty desolate," Mr. Ellis said in an interview.

Retired colonel Steve Day, a former commander of the Canadian Armed Forces' elite Joint Task Force 2, said he could not see how a rescue operation could be carried out without knowing the pinpoint location.

"It is a significant tactical challenge to try and resolve," Mr. Day said. "You have all those islands; how do you get a force somewhat approximate to it without being detected? So do you launch from a neighbouring island? Are you going to launch from the sea?"

Mr. Ellis said Abu Sayyaf has a reputation as a "pretty mercenary" group that kidnaps Westerners for financial gain in support of its terrorist activities. It's very rare for the group to kill Western hostages, he said.

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"Chopping off the head is saying you'd better pay for the remaining hostages or we are going to chop off their heads one after another," Mr. Ellis said. "It could have been a very cold calculation that [hostage negotiators] are buying time and we need to send a message we are impatient."

Mr. Ellis said Abu Sayyaf, once affiliated with al-Qaeda, is heavily concentrated in the Philippines and is now closely aligned with the Islamic State. However, he said the kidnappings have little to do with Islamist extremism and terrorism and more to do with raising money.

"This wasn't a kidnapping or murder because they are against Canada's previous role in Afghanistan or our current role in Iraq," he said. "This is just grab-a-Western and ransom.… I would suggest it is a lot more mercenary than it is terrorism."

The RCMP and the federal Department of Global Affairs have the key responsibility for negotiating the release of hostages, but they are not allowed to discuss ransom payments, which are an offence under Canadian law.

A former high-ranking CSIS officer, who is a senior executive with an international security firm that has handled ransom payments with Mexican drug cartels, said kidnapping negotiations are usually handled through back channels.

"[Global] Affairs would put somebody in touch with the Filipino government who might know a back channel. They might know a journalist who has access to the terrorists. That is the usual route," said the executive, who asked not to be identified. "It would be back channel, privately done. The Canadian government could facilitate some introductions while they couldn't be privy to the discussions. The government can't be involved in it."

Mr. Trudeau said he talked to British Prime Minister David Cameron on Tuesday and they both agreed a no-ransom policy remains the best approach.

The Canadian Prime Minister told reporters the two leaders agreed to press allies to stop paying ransoms to terrorists.

"We had a very direct conversation. The U.K. does have a very firm position, like Canada, of not paying ransom and we agreed it is something we are going to make sure we do bring up with our friends and allies around the world," he said.

"This is a significant source of funds to terrorist organizations that then allow them to continue to perpetrate deadly acts of violence against innocents around the world."

Questions remain about whether Ottawa paid a ransom in 2009 to release Canadian diplomats Bob Fowler and Louis Guay. They were freed after months in the captivity of al-Qaeda in the Islamic Maghreb after a ransom was paid.

As The Globe and Mail reported in 2011, U.S. government memos were leaked that showed U.S. officials angry at the Canadian government for contributing to the ransom cash. In memos from the field cabled to Washington, U.S. envoys expressed fears the ransom deal paid in part by Canada encouraged "nefarious elements throughout the Sahel to continue targeting Westerners for abductions."

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