Ottawa likely to follow U.S., U.K. national security bans of Huawei, experts say

As Canada’s closest intelligence allies move to bar Huawei from their 5G networks due to national security risks, the odds of Canada doing the same are sharply rising, former Canadian officials say.

On June 30, the U.S. Federal Communications Commission (FCC) formally designated Chinese telecom giants Huawei and ZTE “national security threats.” The “weight of evidence” shows Huawei is tied to Chinese military and intelligence, and under China’s new national security laws, the company could be compelled by the Chinese Communist Party to support foreign intelligence operations, the FFC said.

The U.K. — which decided in January to partially include Huawei in its 5G networks — has received a new report from its National Cyber Security Centre that could reverse the policy and cause a complete ban of Huawei, the BBC reported Monday. Australia has already banned Huawei and ZTE on national security grounds.

Ottawa has delayed its national security decision regarding Huawei for too long, Carleton University Prof. Stephanie Carvin, a former Canadian Security Intelligence Service analyst, said.  

Prime Minister Justin Trudeau’s government may have had an optimistic view of China in 2015, Carvin said, but that’s changed since the detention of Canadians Michael Kovrig and Michael Spavor. 

And now, in 2020, with increasing signs of geopolitical “belligerence from Xi Jinping” and new anti-Huawei moves signalled by the U.K. government, Carvin says Ottawa’s options are minimal.

 “I do believe that Canada was trying to hide behind the U.K. decision (to engage with Huawei), and if the U.K. decided to keep Huawei, Canada would have, too,” Carvin said. “But if you have the U.S., U.K. and Australia banning it, Canada would be hard pressed to have Huawei.”

3:43 CSIS believes Canada to be a ‘permissive target’ for China’s interference

Margaret McCuaig-Johnston, a former Canadian assistant deputy minister responsible for engaging China on technology issues, said she believes the U.K. could make an announcement barring Huawei soon.

“It would be astounding to me if the government of Canada allowed Huawei into our networks at all and very dangerous in my opinion,” she said. “I think Canada will move soon on the heels of the U.K. announcement, which is expected shortly.”

Public Safety Minister Bill Blair is leading the ongoing national security review of Huawei. Ottawa pushed the Huawei decision past last fall’s federal election with promises of making a decision after. 

“While we cannot comment on specific companies, an examination of emerging 5G technology and the associated security and economic considerations is underway,” ministry spokeswoman Zarah Malik said. “This review includes the careful consideration of our allies’ advice. The government of Canada is carefully assessing the security challenges and potential threats involved in future 5G technology, while recognizing the opportunities this technology holds for Canada.”

Already two of Canada’s major telecom companies have moved away from Huawei. This year Bell Canada and Telus announced 5G network deals with European suppliers Nokia and Ericsson. Bell has reportedly not ruled out 5G deals with Huawei, pending Ottawa’s decision.

Espionage and more opaque threats

The FCC national security ban against Huawei — which cited espionage allegations, including that “Huawei provides network services to an entity believed to be an elite cyber-warfare unit within the People’s Liberation Army” — followed a number of similar allegations from a broad range of U.S. officials and international critics.

In May, former U.S. national security adviser H.R. McMaster penned an essay for the Atlantic, which claimed that in 2019 “a series of investigations revealed incontrovertible evidence of the grave national-security danger associated with a wide array of Huawei’s telecommunications equipment.”

“Many Huawei workers are simultaneously employed by China’s Ministry of State Security and the intelligence arm of the People’s Liberation Army,” McMaster wrote. “Huawei technicians have used intercepted cell data to help autocratic leaders in Africa spy on, locate, and silence political opponents.”

In reference to the African spying allegation, the FCC report says “although Huawei asserts that there is no evidence it has ever planted spyware in its equipment, there are in fact reports of alleged espionage conducted on Huawei’s networks.”

Huawei has denied all espionage allegations and has rejected findings from the FCC, according to the FCC’s June 30 ban decision.

In response to questions for this story, Huawei spokesman Ben Howes referred to espionage allegations as “old speculation and unfounded assertions.”

“Neither the Canadian government nor any customer in Canada has ever accused Huawei of wrongdoing. Huawei’s global leadership in 5G technology is the result of our long-standing commitment to research and development and the hard work of our talented employees,” Howes stated. “Over the last decade, we’ve invested $650 million into R&D (research and development) in Canada and committed at least 15 per cent of annual revenue to innovation. We sell technology all around the world, but we do not operate it.”

Both Carvin and McCuaig-Johnston said that over the past two years, Ottawa — like the U.K., Germany, France and other countries — has faced serious economic threats and pressure from China on Huawei decisions.

Ottawa’s foot-dragging, then, is somewhat understandable, they said. But damning evidence against Huawei has continued to surface, making any decision in favour of the company increasingly unlikely.  McCuaig-Johnston said Canadians should be extremely concerned by evidence a U.K. parliamentary committee heard in June that Huawei has allegedly built a massive database of elite foreign politicians, businesspeople and academics that the Chinese Communist Party is seeking to influence and “capture” in order to pave the way for Huawei’s expansion plans. 

“From spying in other countries to lying to banks to the national intelligence law in China, there are many reasons why I can’t see any other option but to ban Huawei from Canada’s 5G system,” McCuaig-Johnston said.

Carvin also said allegations of espionage within Huawei are credible.

“Based on what we know of increased obligations to the Chinese Communist Party, it would be entirely reasonable to believe Chinese companies have (CCP) figures within the Canadian offices of Chinese companies,” Carvin said.

But according to Carvin, companies such as Huawei that are designated as global champions by the CCP present a much broader threat to Canada.

“Espionage is one thing, but the biggest risk is more nebulous and opaque,” Carvin said. “In the sense that Huawei is a state champion, it can undermine and take advantage of our free market. It has all kinds of subsidies and economic advantages that companies like Nokia and Ericsson do not. And China has shown it is willing to take hostages on behalf of its companies. So if Canada does something that China doesn’t like in regards to Huawei, it kidnaps citizens. So the bigger threat is geo-economic. And the potential undermining of rule of law.”

The U.S. government has accused Huawei executive Meng Wanzhou and a Huawei subsidiary Skycom of lying to a bank in an Iran sanctions evasion case. And in February 2020, the FBI announced new indictments against Huawei, Meng and Skycom in a “racketeering conspiracy” that alleges Meng and Huawei  misappropriated “intellectual property, including from six U.S. technology companies, in an effort to grow and operate Huawei’s business.”

Meng denies the allegations.

When Canada arrested Meng for extradition to the United States in late 2018, China responded by kidnapping Kovrig and Spavor, Carvin and McCuaig-Johnston said.

Carvin said Canada currently has no strategy to address the broad threat posed by engagement with large Chinese companies. But as a middle power, Canada could ally with other nations in order to develop a so-called “5G for democracies” network.

In his essay, McMaster came to a similar conclusion.

“There should no longer be any dispute concerning the need to defend against the multinational technology company Huawei and its role in China’s security apparatus,” he wrote. “A priority area for multinational co-operation among free societies should be the development of infrastructure, particularly 5G communications, to form trusted networks that protect sensitive and proprietary data.”