Canada bans Chinese tech giant Huawei from 5G network

The federal government has banned Huawei from working on Canada’s fifth-generation networks over security concerns — a decision critics say was long overdue.

The move puts Canada in line with key intelligence allies like the United States, which have expressed concerns about the national security implications of giving the Chinese tech giant access to key infrastructure.

The government is also banning ZTE, another Chinese state-backed telecommunications firm. A government policy statement posted online says companies will have until June 28, 2024, to remove or terminate 5G equipment from Huawei and ZTE.

They’ll also have to remove or terminate any existing 4G equipment provided by the companies by Dec. 31, 2027. The policy statement says the government expects companies to stop purchasing new 4G or 5G equipment from the companies by September of this year.

“This is the right decision and we are pleased to announce it today because it will secure our network for generations to come,” Innovation, Science and Industry Minister François-Philippe Champagne told a news conference Thursday.

WATCH | Canada bans Huawei from access to 5G network:

Responding to a question about the risk of retaliation from the Chinese government, Champagne didn’t indicate that was a factor in the government’s decision.

“Let me be clear, this is about Canada, this is about our national security, this is about our telecom infrastructure,” he said.

Public Safety Minister Marco Mendicino said the decision marks “a new era in safeguarding our telecommunications industry.” He said the decision came after a “thorough government examination [of] 5G and wireless technologies.”

“Canada is a country where people can innovate and start new businesses and leverage new technologies in 5G and beyond, but we also need to safeguard against the risks which can be exploited within those networks,” he said.

Mendicino said new legislation is coming to protect 5G networks. The legislation will “establish a framework to better protect the systems vital to our national security and give the government a new tool to respond to emerging cyber threats,” Mendicino said.

The minister said the legislation also will help protect infrastructure in the finance, energy and transport sectors.

China condemned the move against one of its national champions as a form of “political manipulation” carried out in co-ordination with the U.S., which was aimed at “suppressing” Chinese companies in violation of free market principles. 

“China will comprehensively and seriously evaluate this incident and take all necessary measures to safeguard the legitimate rights and interests of Chinese companies,” the Chinese Embassy in Canada said in a statement posted on its website. 

China commonly employs such language in commercial disputes, which often does not lead to a firm response from Beijing.

The Canadian government’s decision has been a long time coming. Prime Minister Justin Trudeau’s government launched a review of the companies that would be permitted to service 5G networks during its first mandate.

Then-public safety minister Ralph Goodale promised to release a decision on Huawei before the 2019 federal election.

WATCH | Canada bans Huawei from telecom networks after years of delay

Opposition parties blast government, say decision comes too late

But opposition parties say the government waited far too long to make up its mind.

In a media statement, Conservative public safety critic Raquel Dancho and Gerard Deltell, the party’s critic for innovation, science and industry, said the government should have banned Huawei sooner.

“Conservatives repeatedly called on the Trudeau government to do the right thing and listen to security experts and the calls from our allies — but they refused,” they said in a statement. 

They also raised concerns about the cost companies will have to bear to remove existing equipment.

“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,” they said.

In a tweet, Conservative foreign affairs critic Michael Chong also faulted the government.

“It shouldn’t have taken more than three years for the Trudeau government to ban Huawei,” Chong said.

“David Vigneault, director of CSIS (the Canadian Security Intelligence Service), publicly warned the government about the threat from Huawei in early December 2018.”

NDP critic for innovation, science and industry Brian Masse also criticized the government’s timing.

“It has taken the Liberal government three years to make this decision while the other Five Eyes countries made their positions known much sooner,” he said in a media statement.

“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.”

Masse also said the government put Canadians’ security and privacy at risk by delaying the decision.

The development of 5G networks promises to give people speedier online connections and provide the greater data capacity required to allow more people, and things, to connect online.

While the federal government’s review of its 5G policy has taken a broad look at which companies can service the new, faster online networks, most of the attention has focused on whether Huawei would be allowed in — and the possible national security implications of giving it access.

The government went largely silent on the review’s progress after China imprisoned Michael Kovrig and Michael Spavor nearly three years ago — an apparent act of retaliation for the RCMP’s arrest of Huawei chief financial officer Meng Wanzhou on a U.S. extradition warrant.

The two Canadians returned home last fall, hours after Meng reached a deferred prosecution agreement with the U.S. government.

Critics have warned that Huawei’s participation in Canada’s 5G networks could give the company an inside look at how, when and where Canadians use internet-connected devices — and that the Chinese government could force the company to hand over that personal information.

China’s National Intelligence Law says Chinese organizations and citizens must support, assist and co-operate with state intelligence work.

Huawei insists it is a fiercely independent company that does not engage in espionage for anyone, including Beijing.

Huawei executive not surprised by ban

In an interview with CBC’s Power & Politics, Alykhan Velshi, vice-president of corporate affairs for Huawei in Canada, said he’s not surprised by the decision but is still disappointed.

The government hasn’t provided evidence that Huawei is a national security threat, he said. He also questioned what the government will do about scheduled software upgrades for Huawei equipment already installed — something the company is talking to the government about right now, he added.

“I find it hard to believe the government is going to want to suspend those discussions,” he told host Vassy Kapelos.

WATCH | ‘This is a political decision’: Huawei VP on Canadian ban

“Our position is we’re going to continue supporting Huawei equipment in the network, and that will require a level of ongoing co-operation at the technical level between Huawei and the federal government — not just in the days and weeks ahead but, frankly, in the years ahead for as long as this equipment is part of Canada’s telecommunications network.”

Velshi said the company has about 1,500 employees in Canada and that most of them work in research and development. They’re not affected by the decision, he said.

He added that the company’s consumer products, such as phones and watches, aren’t affected by this decision. He said the company has focused on R&D and consumer products since 2018 in anticipation of the ban announced today.

“The reality is that Huawei will form part of Canada’s telecommunications sector for the foreseeable future,” he said

How might this affect the Canada-China relationship?

Various European nations and Canada’s allies in the Five Eyes intelligence-sharing group — including the U.S., U.K. and Australia — have made aggressive moves against Huawei, either by barring it from their networks or by restricting their use of Huawei equipment.

Late last year, China’s foreign ministry warned that Beijing’s relations with Canada stood “at a crossroads.”

Earlier in December, China’s ambassador to Canada signalled that keeping Huawei out would send a “very wrong signal.”

Huawei already supplies some Canadian telecommunications firms with 4G equipment.

As Global News has reported, telecommunication companies spent hundreds of millions of dollars on Huawei equipment while the federal government’s review of 5G was ongoing — although that number has waned over the years.

The government also risks a lawsuit under the terms of a foreign investor protection agreement signed by the government of Stephen Harper with China.

Under that agreement, Huawei Canada — as an existing investor with assets — could bring a claim against Canada.