Canadians Michael Spavor and Michael Kovrig, who became known as "the two Michaels," were detained by Beijing in December 2018 in apparent retaliation for the arrest in Vancouver of a senior Huawei executive on a US warrant.
All three of them were freed in September 2021.
Spavor, a businessman with connections to high-ranking members of the North Korean government, said he was arrested by China because he passed along information to Kovrig -- who then passed that information on to the Canadian government, unbeknownst to Spavor.
He had sought compensation from the Canadian government for his detention.
No details were provided, but the Globe and Mail newspaper, citing unnamed sources, reported that Ottawa agreed to pay Spavor Can$7 million (US$5 million).
Canadian foreign ministry spokeswoman Charlotte MacLeod said Wednesday that the government "is committed to supporting (the two Michaels) in their efforts to turn to a new chapter in their lives based on their individual circumstances and impacts, and in acknowledgement of their ordeal and the suffering caused by their arbitrary detention by China."
Spavor's lawyer John Phillips said simply that "the matter has been resolved."
In an email to AFP, Kovrig denied that his detention had anything to do with espionage, insisting that he "always worked according to the laws and regulations governing diplomats and was transparent in my activities."
He said the same about his advisory work at the non-profit International Crisis Group.
In both roles, he said he sought to "engage China in an effort to get the North Koreans to stop developing and proliferating nuclear weapons and missile technology."
That required talking to people including Chinese officials, analysts and scholars to better understand North Korea, he said.
"I was and always am forthright and open about my identity, my employer and the substance of my work," he added. "Any insinuation that I was anything but open and honorable in my interactions with Michael Spavor is false."
Ottawa has insisted both men are innocent.
Spavor lived in China near the North Korean border, and is among only a handful of Westerners who has met North Korean leader Kim Jong Un.
He ran a tourist travel business, helping arrange visits including by former basketball star Dennis Rodman to the isolated country.
Kovrig served as a diplomat in Beijing from 2012 to 2014, and would have in the course of his duties collected information on security and stability issues in China.
Ottawa does not consider this to be covert intelligence work.
Kovrig was on leave from his job as a diplomat and working for the International Crisis Group when he was arrested in China.
Canadian Prime Minister Justin Trudeau said China had detained the two men "arbitrarily."
"There was absolutely no justification, no reason, no excuse for them to do that ... China does not understand what it is to be a rule of law country that takes care of its citizens," Trudeau stated Thursday.
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