Alberta Court of Appeal Justice Myra Bielby heard arguments Tuesday morning from the federal government and Khadr's defence lawyers.
Bielby said she will make her decision Thursday about whether to release Khadr on bail.
Seated in the prisoner's box in an Edmonton courtroom, Khadr, 28, smiled frequently and appeared relaxed.
Federal Crown prosecutor Bruce Hughson argued that granting Khadr bail while he appeals his war crimes convictions in the United States would threaten the entire system of international prisoner transfers, and said the resulting harm to Canada would be "significant and far reaching."
"This is a high-profile case that has garnered not only national, but international attention," Hughson said. "The risk to Canada's prison transfer system is clearly set out in the affadavit."
Hughson said if the case becomes "notorious," others prisoners will try to copycat what Khadr has done.
Bielby said the $64,000 question was, "How many other prisoners are we talking about?"
Hughson said that would require speculation. He did not challenge idea that Khadr has been a "model prisoner," but insisted it would be better to gradually release him after almost 13 years in prison.
Nate Whitling, acting for Khadr, called the case unusual, and said "the floodgates will not open" if Khadr is released.
He said the government's argument that Canada will suffer irreparable harm is "speculative," because no other prisoner faces the same situation as his client.
A Correctional Services Canada official told court that out of 650 Canadian prisoners transferred here, and about 300 more awaiting transfer, none has a pending right to appeal similar to the Khadr case.
Whitling told the court there has never been any evidence from the U.S. or other foreign governments that there is concern about Khadr's release on bail.
Born in Toronto, Khadr was 15 years old when he was captured by American soldiers in Afghanistan in July 2002. He spent nearly 10 years in a U.S. military prison in Guantanamo Bay, Cuba.
In 2010, he pleaded guilty to five war crimes — including the murder of an American special forces soldier — before a widely discredited U.S. military commission. He has insisted he only pleaded guilty to war crimes to get out of Guantanamo Bay.
Khadr was transferred in September 2012 to the Millhaven Institution, a maximum-security prison, in Bath, Ont. He was later transferred to Alberta, where he was incarcerated as a minimum-security inmate at Bowden Institution near Innisfail.
Court was told Tuesday a recent psychiatric assessment rated Khadr as a "low to moderate risk" to reoffend.
On Nov. 13, 2014, Khadr filed an appeal of his war-crimes conviction in the United States.
He has a parole board hearing set for June 25.Suggest a correction