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"The government of Canada does not pay ransom," Foreign Minister John Baird's spokesman Rick Roth said Wednesday, moments after the publication of a lengthy internal leaked memo from al-Qaeda in the Islamic Maghreb (AQIM) which revealed that $1.1-million in ransom had been paid, at the behest of the Canadian government, to the terrorist organization for the release of captured Canadian diplomats Robert Fowler and Louis Guay.

"Canada does not negotiate with terrorists," Mr. Roth added in a Twitter statement, echoing the frequently uttered words of Prime Minister Stephen Harper.

The memo, however, made clear that terrorist Mokhtar Belmokhtar had negotiated the price with whatever government or party was acting on Canada's behalf.

In fact, it turns out that al-Qaeda was furious with Mr. Belmokhtar for having negotiated a ransom a third the usual price AQIM fetches for hostages: "He chose to step outside the organization and reach an agreement in his own way," the memo's author ranted, complaining about "the most meagre price," which is far below the organization's usual $3-million take. (Hostage-takings are AQIM's main source of revenue.)

Indeed, al-Qaeda was so furious with Mr. Belmokhtar for negotiating with the Canadians – and for failing to file his expense reports on time – that he was shunned, and ran off and formed his own terrorist operation.

So, Canada and its proxies not only negotiated with terrorists and paid ransom, but struck such an effective bargain that it caused a leadership schism within al-Qaeda. Of course, the Canadian negotiations also caused al-Qaeda to be subsidized by more than $1-million – which, the memo makes clear, was used to buy weapons that may have been used in attacks against Western troops, including Canadians, fighting in Mali.

I know Mr. Fowler, and I am very glad that Canada paid to get him and his colleague out of al-Qaeda's clutches after 130 days in captivity in the Sahara, as documented in his book A Season in Hell. And I don't think Mr. Roth should have said anything other than what he did: You do not, as a policy, want to broadcast the fact that you pay ransom and negotiate with kidnappers.

But behind this rhetoric, Canada has placed itself in an awkward position: The Harper government has been more righteous than virtually any other Western country in trumpeting its refusal to negotiate or deal in any way with any organization deemed terrorist. At the same time, Canada has become known as one of a handful of countries that habitually pays off terrorists.

This has been noticed. Three years ago, the U.S. ambassador to Mali warned his superiors in a cable (later leaked) that Canada's practice of negotiating with terrorists was threatening to create an al-Qaeda arms race in the region: "It is difficult to level criticism on countries like Mali and Burkina Faso for facilitating negotiations when the countries that pay ransom, like Austria and Canada, are given a pass."

British officials have told me they also expressed anger at their Canadian counterparts, because the practice made British officials in Mali and elsewhere more susceptible to kidnapping. They gave no credence to the Canadian claim, made off-record to anyone who asked, that countries other than Canada conducted the negotiations on our behalf: Negotiating through a trusted intermediary is still negotiating. Having someone else pay the ransom is still paying ransom.

Canada could have followed the path of Britain, which genuinely does not negotiate with terrorists or pay ransom. Whether this is a wise policy or not, it requires fortitude: A number of Britons have been killed in Iraq and elsewhere because their government has refused to talk, and their families have sometimes appeared on television condemning their government for its heartlessness. Whitehall stands behind its position, arguing that it prevents large-scale kidnappings of British citizens by rendering them economically undesirable.

But then again, the British government does not expend so much energy crowing about never negotiating with terrorists.

Canada risked the ire of its allies again last month, when it became virtually the only country to list Afghanistan's major Taliban groups as terrorist entities – ostensibly with the beneficial goal of outlawing support within Canada, but also, as some noted, to prevent any negotiations. Of course they're terrorists. But the Taliban will eventually be co-governing Afghanistan, and our NATO allies will unquestionably have to negotiate peace with them, to prevent the worst from occurring."

Ottawa's stand hasn't won us any friends – because it doesn't help end the war, and because everyone knows we don't really mean it.