I talked with my mom, who is a lawyer, and she looked up the actual definition of a knife which opens by centrifugal force. Gripping it by the blade and flipping the handle open is allowed in the criminal code. It is only illegal if you apply the force to the blade, ie the blade swings open.
The relevant section of the Criminal Code of Canada taken from Martin's criminal code 2004, Section 84:
"Prohibited Weapon - A knife may come within para. (a) whether or not it
comes within the ordinary meaning of weapon and whether or not it was
designed to be used as a prohibited weapon if in fact its blade, through
wear and tear or alteration, can be fully opened for use by applying
centrifugal force or gravity to the blade. It is the capability and not the
design of the knife that determines whether or not it is a prohibited
weapon. The words "any knife that has a blade that opens automatically
by...centrifugal force" should be interpreted as meaning one that opens by
means of a centrifugal force APPLIED TO THE BLADE AND NOT TO THE HANDLE.
The word "open" in the definition means open with the capacity for use as a
weapon. Any knife which, when held in a position where the handle is above
the blade and the blade drops open at or about a 90 degree angle to the
handle and by gravity continues to open fully, available for use, when the
handle is placed in a vertical position or when centrifugal force is applied
to a partially opened blade, is a knife having a blade that opens
automatically by gravity or centrifugal force and is therefore a prohibited
weapon. R. v. Richard and Walker (1981), 63 C.C.C. (2d) 333, 24 C.R. (3d)
373 (N.B.C.A.)
A knife that will only open by holding the blade and applying centrifugal
force to the handle is not within the definition. However, a knife although
not originally so designed, which through long use opens by application of
centrifugal force to the blade, is a prohibited weapon: R. v. Archer (1983),
6 C.C.C. (3d) 129 (Ont C.A.)"
It is pretty clear that if they flip the handle open that they are interpretting the law incorrectly. I'm going to use this as soon as I can get a hold of the Customs officer that sent me this detainment notice.
Hope this helps someone.
Geoff