Karlheinz Schreiber will not be extradited to Germany, where he faces fraud and tax evasion charges, until after a public inquiry into his dealings with former prime minister Brian Mulroney.
Edward Greenspan, Schreiber's lawyer, negotiated the deal with the Justice Department, CTV's Ottawa Bureau Chief Robert Fife said Wednesday.
In November, a panel of Ontario Court of Appeal judges decided not to intervene in the 2004 extradition order against Schreiber.
On Thursday, the Supreme Court of Canada will decide whether to hear an appeal from Schreiber's lawyers regarding the decision.
Without the deal with the Justice Department, Schreiber would have to be immediately deported if the SCC decided not to hear the appeal.
"If the court decides that it will hear his appeal, then of course Mr. Schreiber will remain in Canada," said Fife.
Schreiber, currently out on bail, will have to go to jail today ahead of the SCC decision.
It is unclear if he will be let out of jail if the SCC rules that they won't hear his appeal.
Fife said the public inquiry may not be up and running until June.
Mulroney-Schreiber relationship
The relationship between Schreiber, Mulroney, and top-level Canadian politicians, goes back to the 1980s. At the time, Schreiber helped push through the sale of European-made Airbus jets to Air Canada. There have been unproven suggestions that Schreiber paid kickbacks to Canadian politicians in an effort to get the sale through.
The RCMP investigated links between Mulroney and Schreiber in the 1990s and found no evidence of criminal wrongdoing.
At one point, Mulroney sued the Government of Canada for libel and won a multi-million dollar settlement. During the suit Mulroney claimed that he barely knew Schreiber.
He has since admitted that he had business dealings with Schreiber after leaving the Prime Minister's Office. Mulroney has said he accepted cash payments for legitimate work from Schreiber on at least three occasions in hotel rooms in the U.S. and Canada.
There is speculation that legal scholar David Johnston -- the man appointed by Harper to set the limits of an inquiry -- has called for a probe with a limited mandate.
In a report given to Harper earlier this year, Johnston apparently proposed the mandate of the public inquiry to focus on what transpired after a June 23, 1993, meeting between Schreiber and Mulroney at the prime minister's official summer residence at Harrington Lake, Que. The meeting was held two days before Mulroney stepped down as prime minister.
Schreiber claims Mulroney agreed at the Harrington Lake meeting to help lobby the Kim Campbell government to support Schreiber's plan to set up a light-armored vehicle plant in Cape Breton.
Schreiber claims he later gave Mulroney $300,000 in cash payments for his lobbying activities, including $100,000 in August, 1993 when Mulroney was still a Member of Parliament. He alleges Mulroney did not do any work for the money.
Mulroney has denied any wrongdoing, and none of the allegations against him has been proven in court.
Mulroney testified before the ethics committee in December that he was only paid $225,000 in cash and maintains he did legitimate work for Schreiber, including lobbying world leaders to buy the armored vehicles for UN peacekeeping missions. Mulroney has admitted he did not pay tax on the $225,000 until 1999 when he learned Schreiber had been charged in Germany for bribery, fraud, forgery and tax evasion.
The former prime minister apologized before the committee for accepting cash payments, saying it was a "serious error in judgment."
