Court of Appeal Justice Myra Bielby said she would decide Thursday whether to grant the federal government's request to keep him behind bars despite a lower court order that he be freed.
Khadr, who had watched the proceedings intently, showed little emotion as he was led from court following arguments, but one of his lawyers, Dennis Edney, was clearly disappointed with the decision.
"Well, of course, I'd like to grab him, throw him in the car, take him home," Edney said outside court.
"When I listen to the argument from the government going on, it's all smoke and mirrors."
At issue is an April 24 order from Court of Queen's Bench Justice June Ross that Khadr, 28, should be given bail pending his appeal of his war crimes conviction in the United States.
He was due for release as early as Tuesday under Ross's order and Edney had arrived with a bag of clothes his wife Patricia had bought fully prepared to take Khadr home for supper.
"We've been in every court in the land and back again," Edney said. "So we have a lot of patience."
The federal government sought the last-ditch stay, arguing that Ross's order threatens the international treaty under which Khadr was brought back to Canada from Guantanamo Bay in 2012.
As such, Crown prosecutor Bruce Hughson said, bail for Khadr would cause "irreparable harm" to other Canadian prisoners seeking to return to Canada and damage the country's international standing.
Hughson leaned heavily on an affidavit from Lee Redpath, a senior Correctional Service of Canada official, who said, "A foreign government would no longer have faith in what it is that we are doing."
The lawyer also said releasing Khadr "abruptly" on bail — given his long incarceration — would pose a risk.
Khadr's other lawyer, Nate Whitling, called the government's position purely speculative. Under normal circumstances, prisoner transfers never happen if there is an appeal pending, he noted.
Khadr "slipped through the cracks" in that no one realized, until after he was back in Canada, that an appeal waiver he had signed after his war crimes conviction before a discredited U.S. military commission was invalid, the lawyer said.
"Nobody realized, except his clever defence lawyers, that he had this right of appeal," Whitling said.
As such, court heard, it was a "virtual certainty" that no harm would occur to anyone if Khadr did get bail.
"No floodgates will open?" Bielby said.
"No floodgates will open," Whitling responded.
Whitling said Khadr is a model prisoner and pointed out he could be released on parole in June, something the U.S. has always known could happen.
Bielby refused the lawyer's request to allow Khadr to go home with Edney pending her decision Thursday.
In Court of Queen's Bench later Thursday, Ross listened as the two sides hammered out bail conditions, should Bielby refuse a stay.
Among conditions she imposed were that Khadr wear a tracking bracelet, live with the Edneys, observe a curfew between 10 p.m. and 7 a.m., and have only supervised access to the Internet.
Also, he could only communicate in English with his family in Ontario via video or phone under supervision, Ross said.
"His case is obviously extremely unique," Ross said. "He has grown up in jail. There will be challenges ahead. Those should be carefully managed."
In Washington, U.S. State Department spokesman Jeff Rathke said the bail fight was "an internal Canadian proceeding."
"We'll leave it to Canadian authorities and the Canadian judicial system to make their decision," Rathke said.
A spokesman for Public Safety Minister Steven Blaney said the government was watching the proceedings closely and repeated that it would fight against any lessening of Khadr's punishment.
The Toronto-born Khadr pleaded guilty in 2010 to five war crimes — including murder for the death of an American special forces soldier — before a U.S. military commission for offences that occurred in Afghanistan in July 2002 when he was 15. He said he only pleaded guilty to get out of Guantanamo Bay.
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