Ottawa is appealing a court ruling that has the potential to significantly increase the number of people making refugee claims in Canada.

On Thursday, a Federal Court judge struck down the contentious Safe Third Country Agreement between Canada and the United States.

The agreement, which came into force in 2004, requires would-be refugees to make their claims in the first of the two countries in which they land. That has prevented claimants from landing in the U.S. and crossing the border to make an application in Canada, significantly reducing the number of claimants.

Citizenship and Immigration Canada said the number of claims filed at its land border offices in the U.S. dropped by 40 per cent in the year after the change.

Under this agreement, the U.S. is considered a safe third country. But in November, Justice Michael Phelan found the U.S. does not meet international requirements for protecting refugees or conventions against torture.

On Thursday, the judge went a step further, ruling the agreement would end on Feb. 1. But Citizenship and Immigration Canada spokeswoman Karen Shadd-Evelyn says the government will appeal, seeking a stay of the judge's decision until a higher court settles the issue.

When the agreement was put in place, the government said the aim was to end "asylum shopping."

But the Canadian Council for Refugees, the Canadian Council of Churches, Amnesty International and a Colombian asylum seeker living in the U.S. filed a lawsuit against the agreement in Federal Court. The groups cited Maher Arar's deportation to Syria and subsequent torture as an illustration of the treatment refugees could face from U.S. authorities in the post-Sept. 11 era.

"Unfortunately the Canadian government, like many governments, is looking for ways to reduce the number of refugees that claim protection here," Janet Dench, executive director of the Canadian Council for Refugees, told CBC News.