A young Canadian convert to Islam who killed a soldier in a hit-and-run incident had been on the radar of federal investigators, who had seized his passport, according to federal authorities.

The suspect was shot by police after a chase in the Quebec city of Saint-Jean-Sur-Richelieu. A second soldier suffered minor injuries in Monday's attack.

Steven Blaney, Canada's public safety minister, said on Tuesday the attack was "clearly linked to terrorist ideology".

Guy Lapointe, Quebec Police spokesman, said the act was deliberate and that one of the two soldiers was in uniform.

He said there were no other suspects at this time.

An official who spoke on condition of anonymity because he was not authorised to speak publicly about the case identified the suspect as Martin Couture-Rouleau, 25.

The suspect was known to authorities and recently had his passport seized, Royal Canadian Mounted Police Commissioner Bob Paulson said.

He was one of 90 suspected people in the country who intend to join battles abroad or who have returned from overseas.

However, it was not known whether the suspect had any ties to armed groups.

"He was part of our investigative efforts to try and identify those people who might commit a criminal act travelling abroad for terrorist purposes," Paulson said.

A Quebec business data base shows Couture-Rouleau started a water-pressure cleaning company in St-Jean-sur-Richelieu in 2012 with two other people.

Harper's tribute

Stephen Harper, Canada's prime minister, said the slain soldier, 53-year-old Warrant Officer Patrice Vincent, was a 28-year veteran with "distinguished service".

"Our thoughts and prayers are with his family members, his friends and his colleagues," the prime minister said.

"This was a despicable act of violence that strikes against not just this soldier and his colleagues but frankly against our very values as a civilised democracy," Harper said in parliament.

Lapointe said the other victim is in stable condition with minor injuries.

Live Box 2014108135930757185

The suspect sat in his car in the parking lot outside a veterans' support centre for at least two hours before the hit and run, Lapointe said.

A police officer on patrol witnessed what happened and immediately gave chase. He was was pursued for about 4km before he lost control of the car, which rolled over several times.

Lapointe said the man was brandishing a knife when he emerged from the vehicle and police opened fire.

The Islamic State of Iraq and the Levant (ISIL) group has urged supporters to carry out attacks against Western countries, including Canada, that are participating in the US-led coalition fighting the group that has taken over large expanses of territory in Iraq and Syria.

Eight Canadian fighter jets, including two spares, were set to depart for the region on Tuesday.

In a related development, Canada has raised its terrorism threat level to medium from low because of a rise in "general chatter" from radical groups such as ISIL, according to a government official.

"This increase is not the result of a specific threat," Jean-Christophe de Le Rue, a spokesman for the public safety minister, said on Tuesday.

De Le Rue said the new terrorism threat level meant Canadian intelligence services had "indicated an individual or group within Canada or abroad has the intent and capability to commit an act of terrorism".

Source: Agencies