The British Prime Minister, Mr Tony Blair, has unleashed a political row in Canada by including two citizens on the Queen's Birthday Honours List. The knighthoods are for Mr George Bain, a Canadian with dual citizenship who is vice-chancellor of Queen's University, Belfast, and has worked as a mediator in Northern Ireland, and for Welsh-born Mr Terence Matthews, a leading hi-tech entrepreneur in Canada who also has dual citizenship.
The problem is a 1919 Canadian policy resolution that requires the federal government be consulted before foreign honours are bestowed on citizens, and prohibits any title. Canadian Prime Minister, Mr Jean Chretien, was annoyed last Friday when he learned that Mr Bain was to be on the honours list the following morning, and phoned Mr Blair to protest.
When both Mr Bain and Mr Matthews - a friend and financial supporter of Mr Chretien's governing Liberal party - appeared on the list the next day, Mr Chretien sent a letter of protest to Mr Blair, accusing him of insulting Britain's closest Commonwealth ally.
In what observers say is the strongest tone used in a publicly released letter to a foreign government leader, Mr Chretien said: "I am writing to you to express in the strongest terms the objections of the government of Canada and my personal objections."
Mr Chretien wrote that it is the "conviction of Canadians" that granting such titles and privileges is "not compatible with the ideals of democracy as they have been developed in Canada".
The issue is particularly sensitive for Mr Chretien because two years ago, he blocked the peerage for Canadian newspaper baron Mr Conrad Black, who also owns the Daily Telegraph and who took out dual citizenship in Britain to qualify for a seat in the House of Lords.
Mr Black last month lost a two-year legal battle in Canada to overturn the government's opposition to his peerage. He now says he will renounce his Canadian birthright to get his title.
Yet, because no advanced permission was sought from the Canadian government in the case of Mr Bain and Mr Matthews, both will be able to accept their knighthoods and keep their Canadian citizenships.
"I am at a loss to explain why the United Kingdom government is not able to respect the policy in this regard of a close Commonwealth ally," Mr Chretien said.