The government of Canada is fighting to keep Washington from having access to passenger lists for Canada's domestic flights. The Canadian transport minister Jean Lapierre said two-thirds of Canada's domestic flights at some point cross through American air space. The Minister said he may have to re-route them (around U.S. airspace) rather than breach the privacy rights of domestic Canadian passengers.
In plans which are not yet finalized, Washington recently warned Canada (and other countries) the U.S. intends to require that its no-fly list procedures apply to all foreign airlines which pass through U.S. airspace. After 9/11, a watch list of suspected terrorists was created by the U.S. that bars those on the list from air travel within its borders.
On Wednesday, Lapierre said it's a “very hot issue,” and that he’s working to protect the privacy of Canadians.
“I’m very worried about it. We don’t think it’s a good idea that Canadians travelling from one (Canadian) city to another would have to be checked under the American no-fly list.” Lapierre said. He estimates that nearly two-thirds of the 278,000 yearly flights between Canadian cities cross over the U.S. border. Most major flight zones from urban centers in Canada are in its southern portion, close to the U.S. where even winds might push a plane across the border.
If the matter can not be resolved, Lapierre said, “We would have to take a northern route, which would be much more expensive.” Yahoo! News Canada reports that Lapierre intends to lobby U.S. Transportation Secretary Norman Mineta against the changes.
Last year, the Canadian province of British Columbia put controls on firms that handle an individual's personal data that prevents them from sharing private information on Canadians with U.S. authorities. The issue goes to Canada's sovereignty of its citizens and the U.S. sovereignty of its airspace.
The historically close relations between Canada and the U.S. was evident during the recent Virgin Atlantic incident, where a flight was intercepted by 2 Canadian CF-18 jet fighters. They were scrambled from Quebec to escort the inter-continental flight originating from London to the Halifax International Airport after a hijacking signal, an apparent accident, was sent from the plane. The plane was detained in Halifax on Friday for approximately four hours. Ultimately it was cleared, and landed safely at its original destination in John F. Kennedy International Airport in New York City.
Both the ACLU and the Electronic Privacy Information Center are involved in lawsuits against the U.S. government relating to no-fly lists. EPIC has received documents under the U.S. Freedom of Information Act which it says "establish that the TSA administers two lists: a "no-fly" list and a "selectee" list, which requires the passenger to go through additional security measures. The names are provided to air carriers through Security Directives or Emergency Amendments and are stored in their computer systems so that an individual with a name that matches the list can be flagged when getting a boarding pass. A "no-fly" match requires the agent to call a law enforcement officer to detain and question the passenger. In the case of a Selectee, an "S" or special mark is printed on their boarding pass and the person receives additional screening at security."     

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U.S. wants to impose its "no-fly" list on most Canadian domestic flights