Top secret documents leaked by US whistleblower Edward Snowden show that Canadian prime minister Stephen Harper's government allowed the US National Security Agency (NSA) to spy on foreign heads of state during the 2010 G8 and G20 summits in Canada.
According to a CBC News report, briefing notes marked "Top Secret" show that the American spy agency set up shop at the US embassy in Ottawa for a six-day surveillance operation.
US President Barack Obama and 25 other foreign heads of state met in Toronto in June, 2010, for the summits.
Canadian authorities were fully aware of the clandestine US operation. An NSA briefing note described the operation as "closely coordinated with the Canadian partner."
The Communications Security Establishment Canada or CSEC is the Canadian equivalent of the NSA.
The CBC report also said the documents did not disclose the precise targets of the NSA operation. However, they described part of the US agency's mandate at the Toronto summit as "providing support to policymakers".
CSEC officials refused to comment.
Jason MacDonald, a spokesman for Harper told Reuters: "We do not comment on operational matters related to national security. Our security organisations have independent oversight mechanisms to ensure that they fulfil their mandate in accordance with the law".
The European Commission has asked the US to 'restore trust' following the Snowden leaks.
"Massive spying on our citizens, companies and leaders is unacceptable. Citizens on both sides of the Atlantic need to be reassured that their data is protected and companies need to know existing agreements are respected and enforced," Viviane Reding, the EU's Justice Commissioner said on 27 November.
The NSA spying scandal could cost US companies $35bn worth of sales over the next two years, according to Washington-based policy research group Information Technology & Innovation Foundation.
Leading technology companies such as IBM and Cisco have already reported a drop in sales to China, a key export market.
Technology is the leading edge of the American economy, which was driven by exports during the recession. Any problems faced by the tech sector could potentially spill over into the other sectors, impacting exports and the US economic recovery.
200,000 Documents Leaked
Earlier in the month, the NSA revealed that Snowden leaked up to 200,000 classified documents to the media.
NSA director general Keith Alexander also noted that it is "very hard" for his agency to prevent such leaks from Snowden, a former contractor with the spy agency.