Defence Minister Peter MacKay is trying to reassure Canadians that allegations of espionage centring on a Halifax naval intelligence officer will not affect the country's reputation among other NATO members.

"Our allies have full confidence in Canada, full confidence in our information," MacKay said during a news conference in Ottawa late Tuesday morning.

MacKay was responding to questions about the case of Sub.-Lt. Jeffrey Paul Delisle, 40, who was arrested in the Halifax area over the weekend. Delisle faces two charges under the Security of Information Act that deal with communicating information that could harm Canada's interests, according to court documents.

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MacKay described the case as a matter of national security because of the charges involved. But he would not discuss specifics, including whether the foreign entity in question is Russia, as at least one intelligence expert has speculated.

"Given the early stages of the proceedings, there is really nothing more that can be said."

Prime Minister Stephen Harper declined to comment on the case, saying it relates to national security and is going to be before the courts.

Accused in custody

Delisle opted to stay in his Halifax jail cell rather than attend court Tuesday and was remanded into custody until his next court date Jan. 25.

Sub.-Lt. Jeffrey Paul Delisle is escorted from provincial court in Halifax on Tuesday. (Andrew Vaughan/Canadian Press)

His defence lawyer, Cameron MacKeen, declined to comment on the case, saying only that there is a presumption of innocence until guilt is proven.

Delisle is accused of passing on state secrets twice, once at some point between 2007 and this year, and once last week.

Court documents also allege Delisle committed breaches of trust "in connection with the duties of his office," in violation of the Criminal Code.

There was no indication what information Delisle is accused of passing or to whom.

Worked at intelligence facility

A senior defence official told CBC News that Delisle worked for a unit called HMCS Trinity, an intelligence facility at the naval dockyard in Halifax. It tracks vessels entering and exiting Canadian waters via satellites, drones and underwater devices. The centre is a multinational base with access to secret data from NATO countries.

Michel Juneau-Katsuya, a former senior intelligence officer at CSIS, said Delisle would have had access to sensitive information about "protecting the Atlantic, our naval fleet out of Halifax and NATO."

He also said the espionage court case may have implications for Canada's credibility.

"If our friends are not capable to trust us to protecting their secrets, they will not want to share secrets with us."

Juneau-Katsuya said the most likely culprit would be Russia, a country that has been trying to gather information about NATO and its members since the Cold War.

Wesley Wark, a security expert with the Munk Centre at the University of Toronto, pointed to China and Iran as two other nations with an interest in Canadian secrets. Whoever it was, Wark said Canadians shouldn't be surprised their military might be an espionage target.

"We have access to a lot of allied intelligence, so we're a perfect and natural target, even though we tend not to think of ourselves as such," he said.

Life sentence possible

The charges against Delisle are rare and serious. A breach of trust under the Criminal Code can net a five-year prison sentence, and convictions under the Security of Information Act can lead to life in prison.

While a copy of the charges allege information was passed to a foreign entity, the section of the act under which Delisle is charged also says the offence can include communicating information to a terrorist group.

A source says the Canadian Forces counter-intelligence branch is conducting a damage assessment as a result of this case.

On Monday, RCMP Commissioner Bob Paulson issued a statement saying the force is "not aware of any threat to public safety at this time from this situation."