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

Michael Kovrig says he will donate to charity any money from a financial settlement with Ottawa that goes beyond income and other losses he incurred for the nearly three years spent in a Chinese prison.

Mr. Kovrig acknowledged Tuesday that he is in talks with the federal government over a compensation package that Ottawa is negotiating with him. The government is also negotiating with fellow Canadian prisoner Michael Spavor.

Both men were arrested and charged with espionage in December, 2018, shortly after Canada detained Huawei senior executive Meng Wanzhou on a U.S. extradition warrant. They were freed from Chinese jails in September, 2021, after the U.S. government worked out a legal deal with Ms. Meng.

The Globe and Mail reported Tuesday that a source said Ottawa has offered around $3-million to each, but that Mr. Spavor’s lawyer, John K. Phillips, is seeking $10.5-million for his client, alleging gross negligence on how government diplomats dealt with Mr. Spavor in China.

Two federal sources said Tuesday that the government is not prepared to offer anything in the range of $10.5-million and that both Mr. Spavor and Mr. Kovrig will receive the same amount of compensation for the hardship endured in Chinese prisons, some of which was spent in solitary confinement. The Globe is not identifying any of the sources because they were not authorized to discuss the delicate legal negotiations.

Mr. Kovrig disputes the amount.

“The actual amount being discussed for me is a lot lower and remains to be determined, but your quote of $3-million is beyond even the range of discussion.” Mr. Kovrig said in an e-mail.

“I hope that any final agreed amount will simply cover the extensive costs and lost income incurred, and that’s all. In the unlikely event any final amount is higher, I will donate anything additional to charity,” he said.

Mr. Spavor alleges that China arrested and imprisoned him and Mr. Kovrig because he unwittingly provided information to Mr. Kovrig that was shared with Canadian and other Western spy services. Mr. Kovrig had previously told The Globe that he followed the “standard of laws, rules and regulations governing diplomats.”

Mr. Spavor has threatened to sue the federal government, and his allegations have put the spotlight on Canada’s Global Security Reporting Program. Mr. Kovrig, during his time as a Canadian diplomat, worked for the GSRP, a special unit within the intelligence branch of Global Affairs Canada that sends foreign-service officers to hot spots to collect security-related information for Ottawa.

Mr. Spavor is one of the few Westerners who has travelled extensively in North Korea and has a personal relationship with dictator Kim Jong-un. He alleges Chinese security forces arrested him because Mr. Kovrig and two other GSRP officers were careless in discussions about him.

The Globe has reported that China subjected Mr. Spavor to lengthy interrogation sessions and that Mr. Spavor admitted to the Chinese interrogators that he provided information to Mr. Kovrig.

The source Tuesday said Mr. Phillips’s bid for a higher monetary settlement has likely been strengthened by the release of a sharply critical examination of the GSRP by the National Security and Intelligence Review Agency, which serves as a civilian watchdog over federal security agencies.

The NSIRA report, released last week, was completed in December, 2020, but deliberately held back from release because Mr. Spavor and Mr. Kovrig were held in Chinese prisons from December, 2018, to September, 2021. The report’s release came after The Globe reported in November about the delay of nearly three years.

The NSIRA review found “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 partly redacted report concluded that inadequately trained GSRP officers do not appreciate the risks and dangers associated with overseas contacts and sources.

The report at one point appears to allude to Mr. Kovrig, who had taken a leave of absence from Global Affairs in 2017 to work for a global conflict analysis group in Hong Kong. On a trip to China in 2018, he was arrested by Beijing after Canada’s detention of Ms. Wanzhou.

“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 Globe has also reported that Canadians Kevin and Julia Garratt were detained by Chinese authorities in 2014 after Mr. Garratt met a GSRP officer.

Beijing accused the couple of participation in espionage, an incident widely regarded as another case of Beijing’s practice of hostage diplomacy. Mr. Garratt said he would not have spoken to GSRP officer Martin Laflamme had he known the discussions would be passed on to CSIS and its Five Eyes intelligence partners, the United States, Britain, Australia and New Zealand.

The Department of Global Affairs says GSRP officers are not covert intelligence operators and do not recruit, handle or pay sources. But NSIRA found that there were no internal policies and protocols in place to provide guidance to GSRP officers, particularly those in countries where there is a “high degree of mistrust for outsiders; often take a hard line on internal security matters; and, tend to deploy mass surveillance on foreigners and citizens.”

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