Public Safety Minister Vic Toews said he is on orders from Prime Minister Stephen Harper, who called him on Good Friday after learning of James' 2007 pardon.
"According to the law, Graham James is entitled to his pardon and that's the issue we should look at - is the law appropriate in this case?" Mr. Toews told Canwest News Service.
"There are clearly certain types of offenders that I have concerns about ... and sex offenders do fit in that category."
Mr. Toews said he will look at rewriting the law so that sex offenders, pedophiles and others who have a troubled history of rehabilitation do not receive rubber-stamped pardons, as is currently the case.
Another possibility is that they could be excluded altogether, as is the case with offenders convicted of crimes garnering life or indeterminate sentences, he said.
"Is a 19-year-old kid who receives a conviction for an impaired driving offence and then serves his sentence, waits the five years and applies because he wants to get in a police force, should he be treated the same way as a serial offender like a rapist, like a pedophile?" asked Mr. Toews, who is responsible for the National Parole Board.
"In my opinion, there is a substantive difference between the offender, the nature of the offences and the difficulties involved in, if I can say cure, for a sex offender."
James was sentenced to 3 1/2 years in prison in 1997 after he pleaded guilty to sexually assaulting former NHL player Sheldon Kennedy and another unnamed player about 350 times over 10 years.
Mr. Kennedy, a vocal spokesman against sexual abuse, said he thinks pardons should be denied to applicants who have not acknowledged the pain they have caused their victims.
James, who went on to coach hockey in Spain after his release from prison, has never apologized, nor has he shown remorse, Mr. Kennedy said in an interview from Calgary.
"I think there has to be a lot more proof that there has been change and to me, there's never been any acceptance on his part of what he's done,"said Mr. Kennedy. "He was right in there teaching kids again. To me, if people really want to change, they wouldn't put themselves in that situation."
Pardons do not erase criminal records. However, they are kept separate from other criminal records, so that they are rendered virtually invisible.
Offenders convicted of serious crimes can apply five years after finishing their sentences, provided they have been law-abiding citizens during that time. Less-serious offenders need only wait three years.
The federal concession permits those who have paid their debt to society to travel, find jobs and qualify for housing. Human-rights laws prohibit discrimination against pardoned offenders.
Mr. Toews, who stressed the value of pardons in helping offenders get on with their lives, said he will also consider whether victims should be notified when an application is granted.
The National Parole Board has little leeway to deny pardons, said director Yves Bellefeuille. The board granted 39,628 pardons in 2008-09. Mr. Bellefeuille said the board typically rejects about 1% of completed applications each year.
"The Criminal Records Act does not differentiate pardon applicants by the type of offence they have committed, nor does it allow the board to refuse to grant a person a pardon based on the nature of their crime," the board said in a written statement.
Vocal complaints from the Prime Minister's Office would not be enough to warrant the independent board to cancel a decision, Mr. Bellefeuille said.
Mr. Harper's spokesman Dimitri Soudas lambasted the parole board for pardoning James and failing to tell the government about it.
"The actions of this convicted sex offender shocked the conscience of a nation - one where the bond of trust between coaches and players in our national game is sacred," Mr. Soudas said on Monday in a statement.
"The prime minister has asked for explanation on how the National Parole Board can pardon someone who committed such horrific crimes that remain shocking to all Canadians."
Former Calgary Flames captain Theoren Fleury claimed in a memoir published last year that he too was sexually abused by James and he went to police earlier this year. James has not been criminally charged following the latest allegations.
Mr. Fleury said that he suspects the Harper government is only making political hay over James' pardon and that he does not expect any action will be taken.
"This needs to happen today," he said in an interview. "But is it going to happen? Probably not."
Even if legislation is introduced to make it harder for sex offenders to win pardons, it would fall dramatically short of the treatment programs and stiffer sentences that are needed to crack down on child sexual abuse, Mr. Fleury said.
James served as a junior hockey coach from 1984-97 with the Western Hockey League's Moose Jaw Warriors, Swift Current Broncos and Calgary Hitmen. His whereabouts is unknown.