FP’s Situation Report: U.S. and Canada reconsider anti-terror strategies; A new Ebola case in NYC; U.S. officials warn Kobani could fall; Is the Islamic State using chemical weapons?; A final goodbye; and much more.

By David Francis with Nathaniel Sobel

After two terror attacks on Canadian soil this week, Canada and the United States must now deal with a new reality: the fight against Islamic extremism has come home. Lawmakers in both countries are considering fundamental changes in how to confront terrorism. Canadian officials are weighing new surveillance options, and there’s a push by U.S. Congress to renew NSA practices allowed by the Patriot Act.

NSA-style surveillance could be coming to Canada much faster than anyone thought. FP’s Harris and Standish: "On Thursday, Prime Minister Stephen Harper addressed members in Canada’s House of Commons, mere yards from where the gunman was shot dead by authorities the day before, and promised to push even harder for previously proposed enhancements to Canada’s surveillance and detention laws for suspected terrorists.

"The amendments would make it easier for Canada to monitor its citizens abroad and to share information with other countries’ spy agencies, particularly the U.S. National Security Agency, which runs a vastly larger and more sophisticated intelligence-gathering apparatus than its counterpart to the north. The proposals have been hotly debated in Canada for the past week, and passage isn’t a foregone conclusion. But the shooting may have given Harper’s conservative government, which holds a majority of seats in parliament, the final push it needs to get them turned into law." Full story here.

In Washington, a new push is underway for long-sought NSA reforms. FP‘s Francis: Now, with Canada reconsidering how it collects intelligence, a source close to [Rep. Jim Sensenbrenner (R-Wis.)] said he will lobby colleagues to sign off on the measure because it contains provisions that would allow the NSA to continue certain kinds of espionage authorized by the Patriot Act." More here.

Republicans who opposed stripping the NSA of its post-9/11 powers are once again calling for greater vigilance. One of the biggest obstacles to passing the Sensenbrenner bill are Senate Republicans who believe the legislation guts NSA’s powers. One of them is Sen. Marco Rubio (R-Fl.).

From BuzzFeed’s Kate Nocera:  Rubio "…said that the United States needs to change its security posture, to not just focus on tracking terrorists coming from overseas to attack America but to try to identify people who are becoming ‘radicalized’ early on." More here.

Are Canadian government buildings to become government fortresses? From The Wall Street Journal’s Rita Trichur and Paul Vieira: "The shooting spree that left a Canadian soldier dead and ended only after an armed man was killed after penetrating Canada’s Parliament building is prompting a review of the country’s security and intelligence protocols." More here.

More on Cpl. Nathan Cirillo, the Canadian soldier killed in Wednesday’s attack. Lawyer Barbara Winters was with Cirillo when he died and has a heartbreaking story. From the Canadian Broadcasting Corporation here.

Also from the CBC, a day after the Ottawa attack comes a reminder that extremism existed in Canada before this week: Misbahuddin Ahmed gets sentenced to 12 years for terrorism convictions. "Ahmed was found guilty of conspiring to facilitate a terrorist activity and participating in the activities of a terrorist group … in July." More here.

Details on gunman Michael Zehaf-Bibeau. From the CBC: Canadian Mounties "say the gunman who stormed Parliament Hill on Wednesday was not among the 93 ‘high-risk’ individuals being monitored as potentially violent radicals, nor was he linked to the man who attacked two soldiers earlier this week in Quebec." They also said he was trying to find his way to Syria. More here.  

A New York City doctor who recently traveled from Guinea has tested positive for the Ebola virus. But the timing of his visit hasn’t tested the Obama administration’s new flight restrictions or the tracking of patients from West Africa.

From CNN: "The doctor, identified as Craig Spencer, 33, came back from treating Ebola patients in Guinea about 10 days ago, and developed a fever, nausea, pain and fatigue Wednesday night. The physician, employed at New York’s Columbia Presbyterian Hospital, has been in isolation at Bellevue Hospital in Manhattan since Thursday morning, the official said." More here.

Local, state and federal public health officials are now taking steps to make sure the disease hasn’t spread. From The New York Times’ Marc Santora: "While officials have said they expected isolated cases of the disease to arrive in New York eventually, and had been preparing for this moment for months, the first case highlighted the challenges involved in containing the virus, especially in a crowded metropolis. Dr. Spencer, 33, had traveled on the A and L subway lines Wednesday night, visited a bowling alley in Williamsburg, and then took a taxi back to Manhattan.

"[O]ut of an abundance of caution, officials said, the bowling alley in Williamsburg that he visited, the Gutter, was closed on Thursday night, and a scheduled concert there, part of the CMJ music festival, was canceled. Health workers were scheduled to visit the alley on Friday." More here.

A case of Ebola in New York City leads to predictable concerns that the disease could be spread on the subway, especially because Spencer used it Wednesday. From Forbes, there’s little need to be concerned. More here.

In Africa, the disease is spreading, now to Mali. More from the BBC here.

Things could get worse. The outbreak in West Africa has the potential to be one of the most deadly infectious disease events since the 1918 flu pandemic says a report from RMS, a leading risk management firm. Full report here.

Syrian rebels oppose the U.S. war strategy of holding – instead of seizing – ISIS territory. FP’s John Hudson: "On Thursday, the Syrian National Coalition, which is recognized by the United States as the legitimate representative of the Syrian people, told Foreign Policy that the plan ‘just doesn’t make sense strategically.’

Oubai Shahbandar, a senior advisor to the Syrian National Coalition: "The only way to defeat ISIS is to defeat ISIS. You cannot be reactive and wait for them to besiege liberated towns and villages." Full story here.

Also on the fight in the Middle East, FP‘s Keith Johnson on Islamic State financing: "The U.S. fight to bankrupt the Islamic State, like the wider military campaign to degrade and destroy the terrorist outfit, will be a long, drawn-out affair, said the Treasury Department’s David Cohen, who heads the unit that tracks terrorist financing. Given that the group is ‘the best-funded terrorist organization we have confronted,’ it also offers the United States plenty of opportunities to try to strike at its coffers, which are filled by illicit oil proceeds, ransoms from kidnappings, cash from looted antiquities, and donations from rich sympathizers in the region." More here.

From the Washington Post, evidence shows Islamic State has used chemical weapons. More here.

Not all Jihadists trying to return are terrorists-in-waiting. Leela Jacinto, writing in FP, says that some disillusioned fighters want to come home but fear arrest. More here.

The Pentagon has stressed the importance of preventing Kobani from falling to the Islamic States, both in terms of strategy and optics. Now, Central Command is warning victory is a long way off.

From Tony Capaccio at Bloomberg News: "In Tampa, the Central Command officials, who asked not to be named discussing military strategy, said it will take the Iraqi army months before its units are capable of mounting sustained counter-offensives against Islamic State forces." More here.

The Wall Street Journal’s Rory Jones has more details on the fight for Kobani here.

A new assessment of the fight against the Islamic State from CSIS’s Anthony Cordesman suggests America’s broader strategy might already be failing. "We not only need to clarify every aspect of what we are really trying to do in Iraq and Syria to fight the Islamic State, we need to go from reporting on global patterns in terrorism and engaging in the struggle of the moment to some clear set of priorities, well defined partnerships with Muslim and other key states, and creating a global strategy that defines clear patterns of action, resources to implement them, and honest metrics for measuring progress – none of which we have done well over a decade after 9/11." Read the full report here.

According to the FBI, the Islamic State is targeting journalists. More here

Welcome to Friday’s edition of Situation Report. If you’d like to be one of our subscribers, we’d love to have you. Sign up for Situation Report by sending us a note at david.francis@foreignpolicy.com and we’ll just stick you on. Like what you see? Tell a friend. And if you have a report you want teased, a piece of news, or a good tidbit, send it to us early. And the more shovel-ready, the better. And hey! Follow me: @davidcfrancis.

Who’s where when today: Secretary of State Kerry and Secretary of Defense Hagel hold a "2+2" meeting with their Republic of Korea counterparts, Minister of Foreign Affairs Yun and Minister of National Defense Han, in Washington… Assistant Secretary of Defense for Special Operations/Low-Intensity Conflict Michael Lumpkin and Deputy Director for Politico-Military Affairs (Africa) Maj. Gen. James M. Lariviere testify before the House Committee on Oversight and Government Reform on the "Coordination of a Multi-Agency Response" at 9:30 a.m… Commander of the U.S.-ROK Combined Forces Command Army Gen. Curtis Scaparrotti conducts a briefing at 11:30 a.m. in the Pentagon Press Briefing Room… Deputy Under Secretary of Defense for Installations and Environment John Conger provides remarks and takes questions on the topic of large landscape conservation at the National Workshop on Large Landscape Conservation at 12:30 p.m. in the Ronald Reagan Building in Washington. At 2:15 p.m., Secretary Kerry attends a meeting of the National Security Council chaired by President Obama at the Department of State.

What’s moving markets today: Markets appear calm ahead of the opening bell despite the Ebola case in New York City. From CNBC: "Cooler heads seemed to have prevailed on Wall Street and U.S. stock index futures traded only moderately lower before Friday’s opening bell." More here.

More on the economics of national security…

The EU has an ambitious new climate change plan. Given that DOD has pegged global warming as a threat to national security, this agreement, which aims to cut greenhouse gas emissions by 40 percent by 2030, is important. It’s also ambitious to the point that it might be impossible for some EU members – Poland, for example – to achieve. More here.

The Canary in China’s Central Bank. Writing in FP, Daniel Altman: "One of the most eager reformers in Beijing is Zhou Xiaochuan, the longtime governor of the People’s Bank of China, the country’s central bank…For years, the logical choice appeared to be Yi Gang, a U.S.-trained academic and internationally respected expert on capital markets and exchange rates…But now it seems that may not be the case. Guo Shuqing, the governor of Shandong province who is a friend of Zhou and is believed to be a trusted advisor to Xi, apparently has the inside track to the job." More here." More here.

The SEC has formally established a cyber security unit. From Inside Cybersecurity: "The SEC has not previously acknowledged the creation of the working group. Last month, an agency spokeswoman declined to comment on the matter." It’s behind a pay wall but worth nothing that the cyber war stretches across the federal government.

From Germany’s Handelsblatt: German companies once favored leniency toward Russia after Moscow annexed Crimea. Now they’re changing their tune. More here.

Also according to Handelsblatt, Germany isn’t taking care of its military equipment. This is not good news for a revitalized NATO coalition. More here.

From FP’s Lynch, North Korea is trying to play nice, but with a purpose. "As part of a rare PR blitz, North Korean diplomats have reached out to reporters, diplomats, and regional experts to derail any efforts to pursue prosecution of senior North Korean officials."

"The intent of North Korea’s extraordinary charm offensive is to convince the U.N. and key governments that North Korea is prepared to allow the world unprecedented, though extremely limited, scrutiny of its human-rights record." More here.

There’s been a delay in South Korea taking control of its military. From Felicia Schwartz at The Wall Street Journal: "The U.S. and South Korean defense chiefs formally scrapped a long-standing time frame for Seoul to take control of its military in the event of war on the Korean peninsula but didn’t set a new deadline for the transfer, choosing instead to focus on military capabilities." More here.

As if U.S. relations with Russia aren’t complicated enough. Adam Goldman in The Washington Post:  "A Russian captured fighting with insurgents in Afghanistan and held for years at a detention facility near Bagram air base will be flown to the United States to be prosecuted in federal court, according to U.S. officials." More here.

Why the U.S. drone war could last forever. "A White House spokesperson tells Vocativ that the troop drawdown in Afghanistan might not affect the covert drone war in the region." More here.

Blackwater’s founder doesn’t sound as sure as he once did that his just-convicted ex-employees are innocent. FP’s Drennan: "A day after a federal jury convicted four former Blackwater private security contractors on murder and manslaughter charges, Blackwater founder Erik Prince backed away from his previous insistence that the men had done nothing wrong during a Sept. 16 2007 rampage in Baghdad that killed 14 Iraqi civilians.

"‘I wasn’t there,’ Prince told Foreign Policy in an interview, referring to the incident in which Blackwater employees abruptly began firing machine guns and throwing grenades at unarmed Iraqis in a busy traffic circle, killing 14 civilians and wounding at least 17 more. ‘I wish that we had cameras that we had asked for – that would have taken the ‘he said, she said’ versions out of there, you know.’

"This was a far cry from Prince’s testimony before Congress on Oct 2., 2007, shortly after the incident, in which he said that ‘based on everything we currently know, the Blackwater team acted appropriately while operating in a very complex war zone on Sept. 16.’" Full interview here.

Writing for FP, Bill Burns – one of America’s foremost diplomats – offers 10 lessons from his 33 years at the State Department: 1. Know where you come from; 2. It’s not always about us; 3. Master the fundamentals; 4. Stay ahead of the curve; 5. Promote economic renewal; 6. Connect leverage to strategy; 7. Don’t just admire the problem – offer a solution; 8. Speak truth to power; 9. Accept risk; 10. Remain optimistic.

Burns on what makes America great: "We have a remarkable military and an economy still bigger, more innovative, and more resilient than anyone else’s. Our system of government and values remains – warts and all – a magnet for people around the world. We possess a transformational energy potential and a diverse and mobile population that is the envy of our competitors. And we have a diplomatic service that still attracts the best young people from across our society to a career of significance. As I prepare to retire, I have never been more proud of America’s diplomats and I have never been more confident in their ability to help renew American leadership in the world. It is hard work, but it has never been more important or more worthwhile." More here.

And finally, another fond farewell to Nathaniel Sobel. He’s been celebrated for his work on SitRep previously, but I personally want to thank him for helping me transition to my new gig. Best of luck in future endeavors, Nathaniel. Don’t be a stranger.