Thursday's decision to deny Jeremy Hinzman refugee status could affect at least eight - and possibly dozens more – American soldiers seeking refuge in Canada.
The soldiers chose to flee to Canada than fight in a war they claim commits atrocities against civilians.
Canada opposed the US-led invasion of Iraq. The Pentagon has urged the deserters to return to the US and take their concerns to their respective military bases.
The ruling, written by Immigration and Refugee Board member Brian Goodman, said Hinzman had not made a convincing argument that he would face persecution or cruel
and unusual punishment if sent back to the United States.
Goodman said that while Hinzman may face some employment and social discrimination, "the treatment does not amount to a violation of a fundamental human right, and the harm
is not serious".
Hinzman's attorney, Jeffry House, said his client would appeal the ruling and still believed that he would be granted refugee status in Canada.
Hinzman, 26, fled from Fort Bragg, North Carolina, in January 2004, weeks before his 82nd Airborne Division was due to be deployed to Iraq. He had served three years in the army, but had applied for conscientious objector status before his unit was sent to Afghanistan in 2002.
US army deserters have a history
of taking refuge in Canada
Hinzman lives with his wife and toddler son in Toronto, where Quakers and the War Resisters coalition of anti-war groups have taken on his cause and provided some shelter.
Coalition supporters intend to demonstrate later on Thursday in front of the US Consulate in Toronto.
Hinzman argued before the Immigration and Refugee Board last December that he would have been taking part in war crimes if he had been deployed with his unit.
He argued the war in Iraq was illegal and he would be persecuted if forced to return to the United States.
Hinzman could face charges of desertion if sent home and would face up to five years in prison. He and seven other US military deserters are being represented by House, a
Wisconsin native who came to Canada in 1970 as a draft dodger during the Vietnam War.
"The treatment does not amount to a violation of a fundamental human right, and the harm
is not serious"
Canadian Immigration and Refugee Board ruling
House believes there are as many as 100 other American war resisters hiding in Canada, waiting to see how Hinzman's case is played out before coming forward.
He said 30,000 to 50,000 Americans fled to Canada during Vietnam and were allowed to settle here, but that Hinzman would have become the first American soldier to be granted political asylum in Canada.
During the Vietnam era, young American men could be drafted into military service, but now enlistment in US military is voluntary. The military attracts many young recruits with job skills training and programmes that help pay university fees.