Mohamed Harkat was awaiting orders to carry out a terrorist attack and his presence in Canada suggests other al Qaeda associates are in the country, the Canadian Security and Intelligence Service (CSIS) concluded in court documents released Monday.
Canadian authorities are considering whether to deport Harkat.
The intelligence service alleges that Harkat, who was arrested last week in Ottawa, trained in the same terrorist training camp as Ahmed Ressam, who was arrested in 1999 while attempting to cross into the United States with a carload of explosives destined for the Los Angeles airport.
"The willingness of Islamic terrorists to use Canada as a staging ground was demonstrated by Ressam," the agency said in its report.
Harkat, 34, also had contacts with Abu Zubaydah, who U.S. officials say recruited and controlled al Qaeda operatives around the world, according to the agency documents. Zubaydah is believed to be a top lieutenant in Osama bin Laden's network. He was arrested last March in Pakistan.
The agency said Harkat arrived in Canada in 1995 from Malaysia and was granted refugee status in 1997 after he convinced federal officials he was carrying a fake Saudi Arabian passport for fear of persecution by the Algerian government.
Harkat's lawyer, Bruce Engel, has said his client is innocent.
"He categorically and unequivocally denies any involvement, association — direct or indirect — with any terrorist organization," Engel said after visiting Harkat in detention.
According to the CSIS, Canada's terrorist threat is four-fold, with attacks possible from religious extremists, secessionist groups (such as the Sikh rebels who blew up an Air India jet liner after takeoff from Toronto in 1985), separatist groups like the Irish Republican Army and domestic terrorists like radical anti-abortion rights or animal rights groups.