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Sublieutenant Jeffrey Delisle arrives at provincial court in Halifax on Feb. 28.Andrew Vaughan/The Canadian Press

It's a hot-button British issue that Canadians should pay closer attention to, if only because it portends so ominously for us too: Should a state cut back on its cherished open-court principles just to satisfy an ally that it can keep a secret?

Or, to put the argument more starkly, maybe it's time we middle-power countries start to get comfortable with the government ordering courts to shield secret evidence, given growing fears that loose-lipped judges will cause the United States to cut us off from potentially life-saving intelligence.

Though relatively rarefied in Canada, the debate is anything but esoteric in Britain, where the Conservative government is making overtures to introduce new secret-evidence laws. Many U.K. observers find the measures unpalatable, given how the politics of international intelligence sharing, and not domestic legal concerns, are driving the bid for stepped-up secrecy, some eight centuries after notions of "due process" first appeared in the Magna Carta.

"The Americans have got nervous that we are going to start revealing some of their information, and they have started cutting back," Justice Secretary Ken Clarke told the BBC this week. The Daily Telegraph republished the quote in an article titled "American intelligence agencies spooked by Britain's open courts" – an account centring on how the U.S. Central Intelligence Agency relayed only partial information about a U.K. terror plot to the Brits, apparently holding out on some valuable information for fear that British courts would expose it.

The fundamentals behind all this are not hard to grasp. By some estimates, the billions Washington spends on collecting intelligence about terrorists, spies and other foreign threats exceeds the intelligence-collection spending of all other countries combined. That makes U.S. information quite literally valuable, and the secret sources and methods used to collect it all the more so.

In the dynamics of this unseen intelligence economy, trust among friends is as much a currency as any greenback, and smaller allies who rely on the U.S. intelligence product are loath to be seen as secret-spillers. And yet, when intelligence information factors into an individual's incarceration, it risks being exposed –especially in liberal democracies where the detained are legally entitled to expansive disclosure of evidence used against them.

The British dilemma came into focus during the case of Binyan Mohamed, an Ethiopian-born British resident who spent five years jailed as an al-Qaeda suspect at Guantanamo Bay. When he returned to sue London over complicity in his wrongful arrest and alleged torture, U.K. courts contemplated ordering disclosure of certain embarrassing classified information – which, in turn, prompted U.S. Secretary of State Hillary Clinton to starkly warn her U.K. counterpart that Washington would start curbing the flow of intelligence information. The British government has since floated a controversial "green paper" on how it could better safeguard secret evidence in future court proceedings.

"The Americans are putting pressure on their allies not to disclose intelligence … we should be paying attention," remarked Kent Roach, a University of Toronto professor who last year published a book called The 9/11 Effect: Comparative Counterterrorism. In an interview he added that "there is a lot of criticism about the [British]government's proposal but I think this is a good example of a very informed debate. At least they have had the courtesy of publishing a green paper."

Mr. Roach pointed out that U.S. courts have largely given a "free ride" to state-secrecy claims by American intelligence agencies – to the point that they now expect similar judicial deference from allies. Yet Canada and Britain have no equivalent of the U.S. State Secrets Act, which forces judges to kowtow to claims of classified information.

Given all this, one is left to wonder what might be contemplated in the bowels of the Canadian bureaucracy in order to satisfy the same imperatives the Brits are wrestling with. Canada's secret-evidence laws basically mirror Britain's at the moment. But if the U.K. is getting pulled in a direction to clamp down on court-ordered intelligence disclosures, it might not be long before Canada feels a need to move in a similar direction.

After all, the spectre of spilled secrets hangs heavily over Ottawa these days. The RCMP's January arrest of a Canadian Forces soldier on espionage charges does not sit well with our American allies, especially given how he allegedly worked undetected as a Russian mole for more than four years at military bases that were repositories of allied – largely U.S. – intelligence information.

Crown lawyers are already invoking Canada's own 10-year-old secrecy law – namely Section 38 of the Canada Evidence Act – to blot out swaths of the evidence against the accused naval intelligence officer, Jeffrey Delisle. Yet he could force a precedent-setting legal showdown if he argues that he is entitled to see more of the evidence against him. After all, the Supreme Court-ordered presumption in this case, as in all Canadian criminal cases, is that the accused should get to see all information that state holds against him, or at the very at least, that which is not clearly irrelevant to his case.

All of which may distill to a pretty strong incentive for government lawyers to settle the Delisle case and others like it out of court, rather than risk exposing secrets by trying to extract the maximum possible sentence or most favourable outcome. You can debate a defence-lawyer tactic sometimes disparagingly referred to as "greymail" – shaking down the government for state-secrets until it quits, essentially – but there's no doubt it's an effective strategy.

The British government has settled several civil suits filed by past detainees accused of links to terrorism out of court, partly out of fear that trials would expose secrets. There are a host of similar suits plodding through Canadian courts that may soon be headed in the same direction.

But under the status quo, the Canadian government is, like Britain, losing its bids to keep supposed state secrets secret. During the federal inquiry into the Maher Arar case, in the first draft of the report government censors blacked out every reference to the American agency most responsible to for the Syrian-born engineer's overseas torture – the CIA. That decision was overturned at Federal Court, which has also lately forced the Canadian Security Intelligence Service to make public information it was highly uncomfortable with sharing. And while the Supreme Court has so far signed off on letting "special advocate" lawyers challenge secret evidence in secret hearings, one wonders whether that may be the next domino to fall.

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