February 2, 2019 8:00 am

With security concerns and criminal charges – should Canada allow Huawei to operate in Canada?

WATCH: Pressure mounting to exclude Huawei from Canada's 5G network

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As countries and institutions around the world are dropping Chinese tech giant Huawei from their contact lists, many are asking if Canada will do the same.

Huawei, along with its CFO Meng Wanzhou, were accused of a 10-year-long conspiracy to sidestep U.S. sanctions on Iran and stealing trade secrets.

Meng, who was arrested in Vancouver, is facing extradition to the U.S. over these charges.

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READ MORE: U.S. hits Huawei and CFO Meng with 23 criminal charges. Here’s what you need to know

Acting U.S. Attorney General Matthew Whitaker said the U.S. is seeking an extradition order in Canada for Meng which includes bank fraud, wire fraud, and conspiracy to commit both. Meng has said she is innocent of all charges, and China called on Washington to “stop the unreasonable crackdown” on Huawei.

A spokesperson for the company said Huawei “denies that it or its subsidiary or affiliate have committed any of the asserted violations of U.S. law set forth in each of the indictments, is not aware of any wrongdoing by Ms. Meng, and believes the U.S. courts will ultimately reach the same conclusion.”

WATCH: Chinese executive at centre of multi-national legal battle makes court appearance 

Along with the criminal charges, countries like the U.S., Australia and many others have banned the use of Huawei equipment, citing security concerns.

On top of that, a Huawei employee was arrested in Poland for espionage. The charges have not been proven in court.

“It is known in the industry that Huawei just did this kind of spying, stealing industrial secrets, and production schematics and engineering concepts and so on,” said Steve Waterhouse, a former National Defence cybersecurity chief.

WATCH: Conservatives continue push to ban Huawei

Gordon Sondland, the U.S. envoy to the European Union, said Thursday that “there is a lot of evidence, most of it classified,” when asked about the security issues.

Canadian and American lawyer Mark Warner cautioned that the U.S. charges stop short of accusing Huawei of spying for the Chinese government, but said that doesn’t mean it won’t in the future.

So far, they haven’t dropped that,” Warner said. If that happened, “the question would be, ‘Would Canada also follow suit?’ as we do have similar types of laws.” 

Despite the charges, Huawei has already invested heavily in Canadian institutions like Hockey Night In Canada, and has existing business dealings with Bell and Telus.

Canadian companies are looking at using Huawei to upgrade the Canadian cellular network to 5G. They are also looking at companies like Nokia and Ericsson. Earlier this month, Ottawa awarded Nokia $40 million to conduct research on 5G technology.

READ MORE: Feds ink $40M research deal on 5G technology with Nokia — Huawei’s competitor

The government is currently reviewing Huawei technology for cyber security vulnerabilities.

Political commentator Nelson Wiseman said the charges “strengthen the position of those in the Canadian government who want to ban Huawei.”

I think the Canadian public … would support the American position,” he explained. “I think there’d be more doubt if he pushes it off.” 

Public Safety Minister Ralph Goodale said a final decision is “some ways off into the future yet.”

WATCH: Canadians want ‘amazing’ 5G technology, but won’t jeopardize security: Goodale 

But Waterhouse believes Canada should exclude Huawei from the competition.

“Maybe it will cost a few million dollars for a few companies but that’s the risk in business instead of just depending on a company that could steal all intellectual property in the coming future,” he told Global News.

Conservative MP Leona Alleslev agreed.

“Absoluetly we need to ban Hauwei,” she told Global News. “It’s what our allies have done and we’re the ones who are currently offside because we’re the ones who haven’t.”

Wiseman said there will be political pressure for Canada to ban the technology from it’s intelligence partners who are part of the Five Eyes agreement — including the U.S., U.K., New Zealand and Australia.

[The others] won’t feel safe communicating highly sensitive information through networks that they don’t feel secure about,” he told Global News. 

Canada’s allies have also asked for a ban, saying if Canada’s network is compromised, it would affect them as well.

“We are concerned about the impact that any decision to include Huawei in Canada’s 5G networks will have on both Canadian national security and ‘Five Eyes’ joint intelligence cooperation among the United States, United Kingdom, Australia, New Zealand, and Canada,” U.S. senators wrote in an open letter to Prime Minister Justin Trudeau in December.

Huawei officials have denied they would spy for the Chinese government, or use their technology for spying in any way.

WATCH: Could Huawei be compelled to spy for Chinese government?

Canadian business who use Huawei

So far, Huawei or it’s officials haven’t been charged with anything in Canada, and international lawyer Mark Warner says it’s not likely Canada would press similar charges, despite having similar sanctions on dealing with Iran.

Warner, a Toronto-based international trade lawyer certified in both Canada and the U.S., said that for now, business agreements between Huawei and Canadian companies are not in jeopardy.

But he said there are many factors that could contribute to whether or not Huawei continues to do business here, mainly to do with pricing.

Since Huawei has suppliers in the U.S., a conviction would jeopardize those contracts — leading to higher costs for Huawei that would jeopardize their competitiveness in Canada and around the world.

Warner says consumer demand might be the deciding factor to whether a company would stay with Huawei technologies.

“How much longer can companies like Bell and Telus in Canada, which are basically selling devices, telecom devices, over which people are providing their most confidential personal information and data,” Warner said. 

“Will [the charges] lead to consumers in the market saying ‘all other things being equal, we’d rather go to Rogers.'” 

Along with business ties, Huawei also has major research partnerships with 10 post-secondary institutions — including University of Waterloo, Carleton University and UBC.

Universities in the U.S. and around the world have unplugged from Huawei amid the accusations — refusing grant money and removing Huawei equipment. Earlier this year, Oxford University in the U.K. suspended future relationships with the company.

“The decision has been taken in the light of public concerns raised in recent months surrounding U.K. partnerships with Huawei. We hope these matters can be resolved shortly,” the British university said in a statement.

Canadian universities have said they are monitoring the situation, but as of January, their partnerships are ongoing.

 

*with files from Mike Le Couteur

© 2019 Global News, a division of Corus Entertainment Inc.

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