Huawei and ZTE cannot be part of the development of the country’s 5G telecommunications network, the Canadian government announced Thursday.
The decision follows years of geopolitical manoeuvring and delays after Beijing arbitrarily detained two Canadians for more than 1,000 days. It ends a tumultuous waiting period over the fate of the Chinese company in the evolving Canadian 5G landscape.
Innovation Minister Francois-Philippe Champagne spoke about the decision alongside Public Safety Minister Marco Mendicino after North American financial markets closed on Thursday.
Mendicino said the government will “prohibit the inclusion of products, and services from high-risk vendors in our telecommunications system,” and introduce new legislation to protect Canada’s critical telecommunications infrastructure.
“We are announcing our intention to prohibit the inclusion of Huawei and ZTE’s products and services in Canada’s telecommunications systems,” said Champagne.
“We’ll take any actions necessary to safeguard our telecommunications infrastructure.”
He said providers who already have equipment from the firms must remove it and replace it in keeping with timelines the government will be setting out.
Champagne was then asked whether the government will compensate firms for that removal.
“The simple answer is no,” he said.
The move comes amid deepening global concerns about Beijing’s disregard for international laws and human rights, and eight months after the release of Michael Kovrig and Michael Spavor from Chinese prisons earlier this fall.
They had been detained in what is widely viewed as retaliation by Beijing for the arrest of Huawei CFO Meng Wanzhou by Canadian authorities in December 2018. That arrest came after American authorities sought her extradition on allegations of bank fraud and skirting sanctions.
Canadian officials did not say when asked on Thursday whether they believe Canadians in China right now could be targeted for retaliation by Beijing, or whether they believe anyone there should leave.
The Global Affairs Canada travel advisory for China urges Canadians to “exercise a high degree of caution in China due to the risk of arbitrary enforcement of local laws.”
In an interview with The Canadian Press on Nov. 8, 2021, Champagne had hinted at a decision on the file and said that Canada only wants to deal with “trusted partners” on the development of the technological networks that will power a looming shift towards artificial intelligence ventures.
5G technology will play a major role in that development, but repeated delays in a decision by the government led Canadian telecommunications players to ink deals with other technology companies over the last three years, effectively freezing Huawei out of the market in the absence of a formal government decision.
However, the question of whether to allow Huawei technology to be part of that network has centred on fears that the company could spy on Canadians and use its technology as a sort of back door to monitor and collect data on Canadians to hand back to the Chinese government.
That’s because the National Intelligence Law in China dictates that Chinese companies must comply if asked to spy by the state.
Huawei Canada officials have insisted they are independent. But they have not said how or why they believed Canadians should trust them to defy any order from the Chinese government.
Canada is the last member of the Five Eyes security alliance – which includes the U.S., U.K., Australia and New Zealand – to either ban or restrict Huawei’s participation in next-generation wireless networks.
The issue became a source of friction between the Trudeau government and the Trump administration, who threatened to pull back from intelligence sharing with allies that allowed the Chinese telecom into their 5G networks.
But Huawei already has a significant presence in Canada’s wireless networks.
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Global News reported last December that Canadian telecoms had spent upwards of $700 million on Huawei equipment while the Liberal government spent years mulling whether or not to ban the company from 5G networks.
“In the years of delay, Canadian telecommunications companies purchased hundreds of millions of dollars of Huawei equipment which will now need to be removed from their networks at enormous expense,” Conservatives said in a party statement.
“Either the Liberal government is going to be asked for compensation from these companies or costs will be passed on to consumers. In either case, Justin Trudeau is forcing Canadians to bear the cost of his inaction and failure.”
In a statement following the decision, the federal NDP also said that delay will cost consumers.
“This delay only worked to raise serious questions at home and among our allies about the Liberal government’s national security commitments and hampered the domestic telecommunications market,” the party said in a statement.
There is growing movement among Western democracies and allies to shore up supply chains and critical infrastructure networks, shifting reliance away from countries that do not share common values.
Russia’s invasion of Ukraine has amplified those calls to build up critical supply chains domestically or among trusted partners, and to rely less on nations that do not share strategic values.
NATO Secretary General Jens Stoltenberg said last year that China doesn’t “share our values,” a refrain that has taken on new prominence as the alliance bands together in the face of Russia’s invasion of Ukraine and puts pressure on China not to support the aggression of the regime.
In a year-end interview with Global News in December 2021, Prime Minister Justin Trudeau said like-minded countries needed to band together against China.
“There’s been a bit of competition amidst friends, because we’re capitalist democracies, on trying to do well — especially given the incredible economic opportunity of the rising Chinese middle class,” he said.
“We’ve been competing and China has been, from time to time, very cleverly playing us off each other in an open market, competitive way. We need to do a better job of working together and standing strong so that China can’t play the angles and divide us one against the other.”
With files from Global’s Mercedes Stephenson and Alex Boutilier.
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