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updated 8/12/2010 10:30:37 PM ET 2010-08-13T02:30:37

The Canadian navy boarded a cargo ship Thursday carrying 490 asylum seekers, including some people Canada has said may be terrorists.

Public Safety Minister Vic Toews said the vessel MV Sun Sea has declared them to be refugees. But he said the government has concerns that there may be members of the Liberation Tigers of Tamil Eelam, or Tamil Tigers, on board. Canada has labeled the Tamil Tigers as a terrorist group since 2006.

The ship is currently off the coast of Vancouver Island and is traveling at a slow rate of speed through fog. The government has been preparing tents on seaside military facilities to house the people from the ship, and jails have been warned they could receive new inmates.

"A vessel carrying 490 individuals claiming refugee status — including suspected human smugglers and terrorists — entered our waters and the Canadian Government is taking action," Toews said. "Human smugglers and human traffickers are now watching Canada's response to judge whether or not they can continue to take advantage of us."

Toews' office originally issued a statement early Thursday evening saying the navy had boarded the ship, but a government official corrected that later Thursday to say the ship was not boarded until shortly after 9:00 p.m. EDT.

The government official, speaking on condition of anonymity because they were not authorized to speak publicly on the matter, said the ship was boarded by navy, police and border services officials and is being taken to a navy base on Vancouver Island.

Passengers onboard are being offered water and food.

The MV Sun Sea reportedly approached Australia a few months ago but was turned away or feared it wouldn't be allowed to dock and sailed toward Canada. The Canadian government is worried more ships are on the way.

Canada is home to about 300,000 Tamils, the largest such population outside Sri Lanka and India. But Canada is worried it's getting a reputation of being too receptive.

Last October, a ship carrying 76 Sri Lankan migrants was intercepted in Canadian waters after crossing the Pacific from Sri Lanka. The group on board the Ocean Lady claimed to be fleeing persecution.

All of the men were immediately detained in jails around the Vancouver area, but most were let go within weeks and months later and only one remained in custody on suspicion of being a Tiger.

By this past spring, he, too, had been released.

The Tigers fought a civil war for a quarter of a century in Sri Lanka seeking a state independent of the ruling Sinhalese majority. The Sri Lankan conflict ended in May 2009 after a massive government operation against the Tigers.

Toews has said the Tigers have used suicide bombings against civilians in Sri Lanka, as well as extortion and intimidation to raise funds within Canada's Tamil community.

Toews said they will prosecute anyone deemed to be human smugglers or terrorists.

"While our government believes in offering protection to genuine refugees, it is imperative that we prevent supporters and members of a criminal or terrorist organization from abusing Canada's refugee system," Toews said.

Chitranganee Wagiswara, Sri Lanka's high commissioner to Canada, has said Canada should not accept their claims for refugee status and said it is a human smuggling operation linked to the Tamil Tigers.

The ship was expected to sail through the Juan de Fuca Strait before landing in the Victoria region, and preparations appeared under way to house the refugees in large tents at nearby Canadian Forces Base Esquimalt and at a nearby naval refueling station.

Two Vancouver-area jails have been told to make room for a flood of new inmates this week.

Legal aid officials have called in immigration lawyers to act as duty counsel for the migrants once they arrive, and members of the Canadian Tamil Congress were traveling to British Columbia to offer any help that is needed.

A local hospital had set aside a special area for any passengers requiring medical attention.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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