OTTAWA - A proposed border deal between Canada and the United States will mean a tradeoff between sovereignty and security, says a former ambassador to Washington.

Michael Wilson, a retired diplomat and one-time Tory finance minister, told a defence and security conference there must be understanding, trust and confidence for the plan to work.

The planned perimeter deal is aimed at increasing co-operation on security practices to fortify the North American border while allowing the unfettered flow of goods, people and services across the 49th parallel.

"This border agreement does raise some very significant issues on sovereignty, on privacy, on the form of collaboration between both sides. Sharing of information is very important to being able to make this agreement work," Wilson said Thursday.

Wilson, part of the Mulroney government that negotiated the Canada-U.S. free-trade agreement, said there must also be "a general acceptance that there's a tradeoff between privacy and sovereignty on the one hand, and security on the other."

Wilson said he hopes "it doesn't take another 9-11" terrorist attack to raise awareness that a better balance of these competing values must be struck.

"It's very important that we get this border agreement resolved."

The business community backs the concept of a perimeter deal as a means of peeling back layers of thickened security at the Canada-U.S. border that have slowed traffic and made trade more cumbersome.

U.S. President Barack Obama and Prime Minister Stephen Harper signed an agreement this month that could lead to a formal North American security perimeter.

Critics say Canada will risk sovereignty and cede control of personal information about Canadians by forging such a deal.

The Conservative government says the deal is not about sovereignty and that both sides value one another's constitutional and legal frameworks that protect privacy, civil liberties and human rights.

Michael Hayden, a former director of the U.S. Central Intelligence Agency, told the conference the security structures and processes of the two countries must be "relatively similar" if the goal is to make the border thinner.

"I understand that these are national decisions on both sides of the line. And we're each free to take the decisions we feel appropriate," said Hayden, CIA director from 2006 to 2009.

"You just need to understand that if your decisions are markedly different than ours, it affects our view as to how thick the border should be."

Hayden wondered how far Canada would be willing to go in conforming to security intelligence practices of the United States -- for instance, sharing information if Ottawa knew it would mean a targeted U.S. killing of a terrorist leader in Somalia.

He said Canada will decide what constraints to place on the Canadian Security Intelligence Service, the RCMP and other organizations.

"How much of the information those organizations gain (do) you feel comfortable sharing with the American security services? That is up to you. But your answers to those questions will affect the American view of what that border should look like."

Hayden encouraged "an honest dialogue" that will mute the effects when Canada and the U.S. do not agree, and help identify similarities when the countries are able to act together.

The United States gets nervous with Canada because "we are not pulling our weight on the border right now," said Liberal Senator Colin Kenny, former chair of the upper chamber's security and defence committee.

"The solution is for us to have a more robust border approach," said Kenny, who has long called for a beefed-up Canadian presence on the Great Lakes and improved airport security.

Still, it's important that America have a friend that doesn't always say Yes, he told the gathering.

"Because America needs to reach out beyond its own borders, and if you can't convince Canadians then you're really into an uphill fight elsewhere."