Justice Minister Peter MacKay distanced himself from an earlier suggestion that Ontario minister Michael Chan is the subject of an ongoing investigation, while Queen's Park declined to answer questions about how it concluded that CSIS's allegations against Mr. Chan were "baseless."

On Thursday, Mr. MacKay said he was misquoted earlier this week and did not mean to say that Mr. Chan is the subject of a live Canadian Security Intelligence Service investigation concerning Chinese foreign influence. "To suggest that I have waded into this is a complete falsehood," he said.

The Globe and Mail has reported that CSIS cautioned Ontario in 2010 about Mr. Chan's conduct, warning that the minister had an unusually close rapport with China's Toronto consulate. The spy agency was never investigating the minister, nor was the minister ever suspected of a crime.

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On Thursday, Mr. MacKay backpedalled from his earlier remarks, saying he wasn't commenting on the Chan case and did not confirm there was an investigation. He also denied speaking in broader terms about the concern of foreign influence – although on Tuesday he had warned public officials "to be very diligent in how they conduct themselves."

The Chan affair has underscored the pitfalls of monitoring foreign influence, a rare, high-stakes example of a province and spy agency at odds over what vulnerability entails. CSIS saw national security at risk with a nation that, like only a handful of other countries such as Russia, is involved in nefarious activity abroad; Ontario saw a minister building a relationship with a vital trading ally, and doing a good job of it.

Mr. Chan referred to The Globe coverage on him as "a blend of innuendo and half-suggestions." Premier Kathleen Wynne, who promoted Mr. Chan to Minister of Citizenship, Immigration and Trade last year, called the CSIS allegations "baseless."

A spokeswoman for the Premier did not respond to questions Thursday about how CSIS's concerns were vetted and how the conclusion was drawn that they were without merit.

In June, 2010, the CSIS director at the time, Richard Fadden, noted during a CBC interview that two provincial ministers had attachments to foreign countries. Then-premier Dalton McGuinty followed up on the inflammatory statements, saying CSIS should provide more information or desist from making accusations.

Around two months later, the spy agency took the extraordinary step of visiting Queen's Park to brief the province about the minister. A senior CSIS official cited at least five concerns, such as frequency of communication and an alleged request for a visa, which led it to wider suspicions that Mr. Chan was susceptible to foreign influence. It was up to Mr. McGuinty's office to decide the next course of action.

In October, 2010 – around two months after the CSIS briefing – Mr. McGuinty's office said in a statement the matter was effectively closed, the CSIS concerns insubstantial. The statement did not name Mr. Chan as the minister in question, nor did it say what action the province took to clear the cabinet minister.

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Last October, the Wynne government told The Globe that Mr. Chan had consulted with the Integrity Commissioner after the 2010 briefing and was told there were no concerns. Citing privacy, the office would not reveal what specific concerns had been raised. In a Globe interview with Mr. Chan last October, Mr. Chan named two concerns; The Globe later learned there were at least five.

Ms. Wynne has said she did not learn of CSIS's suspicions until The Globe started asking about them last October. Intimating that her office accepts the versions of events that Mr. Chan and Mr. McGuinty's staff have offered, she suggested the matter did not require further investigation.

Mr. McGuinty refused comment about the affair, as did his chief of staff at the time, Chris Morley. Mr. Morley had questioned Mr. Chan about the CSIS concerns in 2010.

On Thursday, the Chinese embassy in Canada wrote a letter to The Globe that in part expressed support for the minister. "What Ontario's minister Mr. Michael Chan has done to develop Ontario's co-operation with China is consistent with Canada's national policy towards China."

Prime Minister Stephen Harper, meanwhile, is refusing to comment on the matter. "I have no comment on these rumours or allegations," he said in Toronto on Thursday. "They're obviously a matter for CSIS and for the government of Ontario."

With a report from Jane Taber