The Supreme Court of Canada is hearing arguments today on who has jurisdiction over a supervised drug injection site in Vancouver, British Columbia.

The court is weighing whether or not the controversial clinic will continue to operate as a health-care facility run by the province, or whether it should be controlled by the federal government, which has hinted it may shut the facility down.

Insite was established in 2003 by the federal Liberal government of the day.

Under a constitutional exemption to the federal Controlled Drugs and Substances Act granted by the minister of health at the time, the clinic was able to operate without staff or clients being charged with trafficking or possessing controlled substances.

When that exemption expired, with no indication the governing Conservatives would extend it, Insite successfully obtained a permanent exemption. The Conservatives subsequently challenged that, however, triggering the legal fight that has now wound up at the Supreme Court of Canada.

Anne McNabb, from Vancouver Coastal Health, says it sounds like the Conservative government will shut down the site if they win the court case.

"I feel hopeful that we will come out of this with something that allows Insite to remain open, but what that will look like, I don't know," she said on CTV's Power play.

Insite was established as a safe place for injection drug users in Vancouver's notorious Downtown Eastside -- estimated to number as many as 5,000 of the area's 12,000 residents -- to get their fix.

Users simply bring their own drugs, and they're given a clean needle, sterilized water and a mirrored, stainless alcove where they are supervised by nurses.

Besides responding to emergencies such as overdoses, the staff also provide health and counselling services and even let users stay in a "chill out" room before they leave.

Recovering addict Gary Kyle credits Insite with saving his life.

"I've OD'd in here, and I could have been just another statistic out there," he told CTV News.

Proponents of the scheme say Insite provides a form of health-care, and therefore falls under provincial jurisdiction.

According to a peer-reviewed study published in The Lancet medical journal last month, the clinic has indeed had a significant impact on the number of drug-related deaths in the impoverished 15-block lower east side neighbourhood around the clinic.

The study found that between 2001 and 2005 there were 89 overdose deaths (a third of all Vancouver overdoses) that occurred within 500 metres of the Insite location.

After Insite opened, the study found that fatal overdoses dropped 35 per cent in the surrounding area, compared to 9 per cent in the rest of Vancouver.

Tim Gauthier, a registered nurse at Insite and the location's acting clinical coordinator, said the "bottom line is . . . Insite saves lives."

"If Insite closes, people are going to die," he told CTV's Power Play Thursday.

Supporters, including the British Columbia government, argue that's just one of a growing number of peer-reviewed studies that have concluded Insite curbs open drug use, reduces needle sharing, prevents overdose deaths, reduces the spread of HIV and hepatitis, and even curbs crime.

But the governing Conservatives, who have long-argued that the site actually serves to encourage addiction, counter that because the site deals with federally-controlled substances it actually falls under their purview.

While they have sought to shutter the clinic, Prime Minister Stephen Harper's Tories have called for a national drug policy focused on preventing users from injecting in the first place, and treating those who do.

Gauthier said Insite does not encourage drug use and in fact, has issued more than 17,000 referrals to detox services.

"People are more likely to access detox services by using Insite," he said.

According to Insite supervisor Russ Maynard, the Vancouver centre sees more than 800 people come through its doors daily. Of the more than 1.5 million supervised injections since it opened, the sites operators say ther have been approximately 2,400 overdoses. Maynard says none have ended in death.

In its consideration of the case, the Supreme Court of Canada will decide under which government's jurisdiction the clinic falls, as well as the extent of its protection under the Charter of Rights and Freedoms.

While Insite was the first and remains the only legal injection site in North America, in 2009 the Canadian Medical Association Journal counted 60 similar clinics operating in 26 Australian and Western European cities.

As it stands, Insite is funded entirely by the B.C. government through Vancouver Coastal Health, with a budget of about $2.9 million a year.

With files from The Canadian Press