Justice John Rooke said Monday that the U.S. military did not specify that when it handed Khadr an eight-year sentence for killing an American special forces soldier in Afghanistan when Khadr was 15.
Khadr pleaded guilty to five war crime offences, including murder, in 2010.
He is now an inmate at the maximum-security Edmonton Institution. His lawyer, Dennis Edney, argued that he should be treated as a young offender and moved to a provincial jail.
Edney told the court that an eight-year sentence for the murder and four other crimes only makes sense as a youth sentence.
But the federal government argued that Khadr was given eight years as a youth for murder and the sentences on the four remaining offences were to be served concurrently as an adult.
Edney called the Harper government's position an "absurdity" and said its math doesn't make sense. He said if Khadr had committed the crimes in Canada, he would be serving less time.
He also filed an affidavit from a U.S. military law expert stating there's no such thing as concurrent sentences in their law books.
"We think it's a simple argument," Edney later explained to reporters outside court.
"It requires a determination be made whether the sentence he received in Guantanamo, if it occurred here in Canada, would be treated as a youth sentence. And we say yes."
After several hours of complex legal discussion, the judge said he was tempted to issue his decision but the case requires detailed written reasons. Rooke gave no date when he would be ready. He also gave no hint at which way he was leaning.
He said the case is about interpretation of the law.
"We are not applying policy. That's for Parliament ... There is no discretion that was exercised that needs to be reviewed," Rooke said.
Prime Minister Stephen Harper waded into the debate during a Monday news conference in Ottawa.
"This is an individual who, as you know, pled guilty to very serious crimes including murder and it is very important that we continue to vigorously defend against any attempts, in court, to lessen his punishment for these heinous acts," Harper said, while answering a larger question about fears Muslim youth are being radicalized.
Edney chastised the prime minister for his comment.
"Canadians should be concerned with the interference by our government in the judicial system without waiting for the facts to come out. This is not about guilt or innocence. This is just about where he gets placed."
Monday's appearance was the first time Khadr has been seen in public in more than a decade.
Khadr flashed a broad smile as he was led into the courtroom, sporting a white polo shirt and full beard. He shook hands with his lawyers and waved at some of the dozens of supporters in the courtroom.
Many with Amnesty International wore orange ribbons to support Khadr. Some passed around a greeting card to sign well wishes.
One man later took off his shirt, stood up and started rambling in court. He mentioned Sept. 11 and told lawyers to stop shuffling through their papers.
"Enough is enough!" he said before court sheriffs started to drag him away. "He's my brother! I love you!"
Lawyer Bruce Hughson, representing the federal government, told the judge that Khadr has been treated no differently than any other Canadian who commits a crime outside the country and returns home to serve his sentence.
He said that Canada has no role to review or amend the decision of a foreign court on such an offender.
The court cannot "re-sentence" a person, he said. "That's the process Canada adopted. Canada adopted enforcement."
The federal government, which blocked a request by The Canadian Press earlier this year to interview him, has insisted that Khadr is a dangerous terrorist who deserves to be treated as such.
Born in Toronto, Khadr spent a decade in the notorious Guantanamo Bay prison in Cuba before he received the eight-year sentence.
In September 2012, he was transferred to Canada to serve the remainder of his sentence. He was first incarcerated largely in isolation at the maximum security Millhaven Institution in eastern Ontario before moving to Edmonton in May.
He was eligible for full parole in July but hasn't applied, said Edney, because "he hasn't got a chance."
He said because Khadr has been so isolated, he hasn't been eligible for prison programs. And that's what he needs in order for the parole board to release him.
If Khadr continues to be labelled as a maximum security inmate, "he'll never get out," said Edney.
"This government is running out the clock on him for the next five years."
Khadr's warrant expiry date — the last day of his sentence — is Oct. 30, 2018.
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