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One of the two Canadians jailed by China for nearly three years in a case that was at the heart of a diplomatic crisis is seeking a multimillion-dollar settlement from Ottawa, two sources say, alleging he was detained because he unwittingly provided intelligence on North Korea to Canada and allied spy services.

Michael Spavor alleges that the deception was conducted by fellow Canadian prisoner Michael Kovrig, and it was intelligence work by the latter that led to both men’s incarceration by Chinese authorities, according to the sources.

These allegations cast a new light on the lengthy imprisonment of Mr. Kovrig and Mr. Spavor as well as on the work that Mr. Kovrig was doing in China.

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    One of the two Canadians jailed by China for nearly three years in a case that was at the heart of a diplomatic crisis is seeking a multimillion-dollar settlement from Ottawa, two sources say, alleging he was detained because he unwittingly provided intelligence on North Korea to Canada and allied spy services.

    Canada flatly denied at the time that the two Michaels were involved in espionage, with Prime Minister Justin Trudeau, cabinet officials and then-ambassador to China Dominic Barton saying that Beijing had arbitrarily incarcerated the two Canadians on trumped-up charges in retaliation for the arrest of Ms. Meng.

    Confidential negotiations are taking place between Toronto lawyer John K. Phillips, who is representing Mr. Spavor, and Patrick Hill, executive director and senior counsel at the federal Department of Justice and Global Affairs Canada, the sources say.

    That information, he alleges, was later passed on, unbeknownst to Mr. Spavor, to the Canadian government and its Five Eyes spy-service partners in the course of Mr. Kovrig’s duties as a diplomat with the Foreign Affairs department’s Global Security Reporting Program.

    A third highly placed source told The Globe that Mr. Kovrig was considered an intelligence asset, as a diplomatic officer at the Global Security Reporting Program (GSRP) within the Canadian embassy in Beijing, and later when based in Hong Kong at International Crisis Group.

    According to a 2018 internal evaluation by Global Affairs, “domestic and allied partners ascribe a high value to GSRP reporting, characterizing it as a ‘uniquely valuable product, which fills a clear niche within the security and intelligence community.’ ”


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