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Michael Spavor, centre left, and Michael Kovrig, centre left, receive a standing ovation in the House of Commons prior to U.S. President Joe Biden's address of Parliament, in Ottawa, on March 24, 2023.Adrian Wyld/The Canadian Press

Prime Minister Justin Trudeau says the government’s willingness to support Michael Spavor and Michael Kovrig, who endured three years in Chinese prisons, doesn’t mean either man had engaged in espionage.

The government recently reached a multimillion-dollar compensation settlement with Mr. Spavor, but Mr. Trudeau declined to say Thursday whether a similar financial package was given to Mr. Kovrig, a former diplomat who worked for a controversial intelligence unit at Global Affairs Canada.

The Chinese embassy in Ottawa reacted to the Prime Minister’s statement, saying the two Michaels engaged in activities that endangered China’s national security.

“The recent reports from Canadian media have once again proven that these facts cannot be denied. Canada’s hyping up of the so-called China’s “arbitrary detention” is a completely false narrative,” the embassy said in a statement. ”We urge the Canadian side to face the facts and deeply reflect upon its mistakes instead of continuing to attack and smear China, and misleading and deceiving the Canadian public.”

In November, The Globe and Mail reported that Mr. Spavor threatened to sue both the federal government and Mr. Kovrig, alleging that he had unwittingly provided intelligence on North Korea and China to Mr. Kovrig that was later shared with Ottawa and its Five Eyes allies through the Global Security Reporting Program (GSRP) at Global Affairs Canada.

Mr. Trudeau told reporters at an event in Toronto that the two Michaels went through “unimaginable difficulties” after their arrests in late 2018 and were used as “pawns in geopolitical games.”

The two men were arrested and accused of espionage after Canada detained a senior Huawei senior executive on a U.S. extradition request. They were freed from Chinese jails in September, 2021, after the U.S. government worked out a legal deal with Meng Wanzhou, the daughter of Huawei’s founder.

“The Chinese government arrested and arbitrarily detained two Canadian citizens – Michael Kovrig and Michael Spavor – for political reasons. There was absolutely no justification, no reason, no excuse for them to do that,” Mr. Trudeau said.

He said any suggestion that support provided to the two men from Ottawa is somehow connected to payment for espionage activities is false.

“The fact that the Chinese government thinks that because we actually believe in supporting and taking care of Canadian citizens who go through hardship, as somehow proof for letting them off the hook, just demonstrates the depth to which China does not understand what it is to be a rule-of-law country that takes care of its citizens,” Mr. Trudeau said.

His remarks came a day after Mr. Spavor’s lawyer, John K. Phillips confirmed to The Globe that his client had resolved the legal dispute over his imprisonment. A source said the compensation package was worth about $6-million, not including legal fees and expenses. The Globe is not identifying the source who was not authorized to discuss the matter.

In late December, Mr. Kovrig acknowledged that he was in talks with Ottawa over compensation. He told The Globe that he would donate to charity any money from a financial settlement that goes beyond income and other losses he incurred for the nearly three years spent in a Chinese prison.

Reached on Wednesday, he declined to say whether he has reached a settlement himself.

In the past, he has told The Globe that he acted properly in his dealings with Mr. Spavor and followed the “standard of laws, rules and regulations governing diplomats.”

China alleged that Mr. Spavor, who ran cultural trips to North Korea and had a personal relationship with the country’s dictator, Kim Jong-un, supplied intelligence to Mr. Kovrig, who served as a GSRP officer at the Canadian embassy in Beijing from 2012 to 2014.

Mr. Kovrig took a leave of absence in 2017 to work at the International Crisis Group in Hong Kong. He was arrested in 2018 after he returned to China, where he no longer had diplomatic immunity.

Mr. Spavor’s financial settlement came after a highly critical report from the National Security and Intelligence Review Agency about the GSRP intelligence unit. It found that GSRP officers lacked adequate training and there was “an absence of risk assessments, security protocols and legal guidance specific to the increased scrutiny that GSRP officers may attract due to the nature of their reporting priorities.”

The NSIRA report at one point appears to allude to Mr. Kovrig, who was arrested after returning to China without diplomatic immunity.

“It was not clear if all officers understood that once they are no longer afforded diplomatic immunity, a receiving state may seek retaliatory measures against them,” the report said, adding former GSRP officers “may be liable to prosecution for illegal acts they performed during the mission if they later re-enter the receiving state without the protection of diplomatic immunity.”

The watchdog report was written in 2020 but held back until Mr. Kovrig and Mr. Spavor returned to Canada.

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