Robert Fife, Ottawa Bureau Chief; Alexandra Posadzki, Telecom Reporter; Paul Waldie, Europe Correspondent; Adrian Morrow, U.S. Correspondent
Canada is now the only member of the Five Eyes intelligence-pooling alliance that has not barred or restricted use of equipment from Huawei Technologies Co. Ltd. in its 5G networks after Britain changed course on Tuesday and banned the Chinese telecommunications giant’s gear.
The federal government is giving no indication of whether it will follow the lead of Britain and its other Five Eyes allies – United States, Australia and New Zealand – and freeze Huawei out of supplying the super-fast 5G cellular technology, despite renewed calls from the opposition parties and mounting allied pressure.
On Tuesday, British Prime Minister Boris Johnson banned the purchase of any new Huawei 5G equipment and ordered all of its 5G gear stripped from the country’s telecommunications networks by 2027.
The decision is a victory for U.S. President Donald Trump and bi-partisan members of the U.S. Congress who have long viewed Huawei as a security threat and want Canada and other countries to ban its gear.
Britain set restrictions on Huawei in January, but not a 5G ban. On Tuesday, Mr. Johnson reversed that decision after the United States blocked Huawei’s access to semiconductor supplies and computer chips that are based on U.S. designs – a move that could push the Shenzhen-based giant to seek less-trusted alternatives, increasing the security risk of its components.
In Washington, Mr. Trump cheered Britain’s decision and warned that if countries “want to do business with us, they can’t use” technology from Huawei.
Opposition parties in Canada renewed their criticism of the federal government after Britain’s announcement.
“The fact that Canada is now the only country in the Five Eyes to have not taken action to mitigate the security risk of using Huawei in our 5G network is an abject failure on the Trudeau government’s part to protect our national security,” Pierre-Paul Hus, the Conservative Party’s critic for national security, told The Globe and Mail. “The Trudeau Liberals’ failure to ban Huawei from our 5G network puts Canada offside with our allies, partners, and threatens intelligence-sharing with our closest friends.”
A senior federal source told The Globe that cabinet is not expected to decide soon. The source, who The Globe is not identifying because they were not authorized to discuss national security issues, said cabinet has had only one discussion on Huawei, several months ago.
The source said the government had three options: ban it outright; set conditions and mitigation measures on Huawei 5G gear; and allow it into the network under current restrictions, which require the equipment to be tested. The third option is no longer under serious consideration, the source said.
Innovation Minister Navdeep Bains, a key decision-maker on the Huawei issue – declined an interview request. His office would not say when a decision will come.
“Canadians can be assured that we will not compromise on matters of national security,” spokesman John Power said in a statement. “Our government has been clear that it will pursue an approach that takes into account domestic and international considerations, and will make the best decision for Canadians.”
Bloc Québécois Leader Yves-François Blanchet said cabinet may be reluctant to ban Huawei to avoid a further strain in relations with China at a time when Canada’s arrest of a company executive has already resulted in Chinese trade sanctions and the imprisonment of Canadians Michael Spavor and Michael Kovrig.
He said Ottawa should be very careful about Huawei’s 5G gear and “this could mean excluding Huawei technology in Canada.”
NDP foreign affairs critic Jack Harris said the special House of Commons Canada-China committee should hold hearings so Canadians can understand what is at stake.
“By doing nothing and just watching what others are doing, I think we are abdicating our responsibility,” he said.
The Americans and Australians say Huawei answers to China’s ruling Communist Party and could be compelled to help Beijing spy on or sabotage Western networks. Article 7 of China’s 2017 National Intelligence Law says Chinese companies must “support, co-operate with and collaborate in national intelligence work” when asked.
At a press conference on Tuesday, Mr. Trump took credit for getting other governments to block Huawei.
“We convinced many countries – many countries, and I did this myself, for the most part – not to use Huawei because we think it’s an unsafe security risk, a big security risk,” Mr. Trump said. “I talked many countries out of using it. If they want to do business with us, they can’t use it.”
The President did not provide any further details, and made no specific references to Canada.
Australia and the United States were the first Five Eyes members to bar Huawei gear from 5G networks. New Zealand rejected one wireless firm’s proposal to use the company’s gear exclusively.
Huawei has repeatedly rejected suggestions it is an arm of the Chinese government, and blamed Washington for the U.K. rollback.
“We remain confident that the new U.S. restrictions would not have affected the resilience or security of the products we supply to the U.K.,” Huawei spokesman Ed Brewster said on Tuesday. “Regrettably, our future in the U.K. has become politicized. This is about U.S. trade policy and not security.”
Other countries building 5G networks without Huawei include Japan and Taiwan. The Indian government is also weighing whether to bar Huawei. Some U.S. allies – notably France, Germany and Thailand – have stopped short of excluding the company entirely.
Britain’s earlier decision to allow Huawei’s 5G components in non-core parts of the network had been seen as a model for other countries, and only a handful had adhered to Mr. Trump’s call. That could change now that the U.K. has come to a different conclusion about the security threat.
Oliver Dowden, the Secretary of State for Digital, Culture, Media and Sport, said on Tuesday that the government’s decision was not based on U.S. lobbying but on a fresh assessment of Huawei by the U.K’s National Cyber Security Centre (NCSC), which provides advice on computer threats. “As facts have changed, so has our approach,” he said.
The agency has been monitoring the company’s products for a decade. In January, it said any risks with Huawei’s 5G components could be managed as long as they were in non-core sections of the network, such as antennas and base stations.
The NCSC took another look this spring after the new U.S. sanctions on Huawei in mid-May that prohibited Huawei from using U.S. computer chips or any chip designed or made with U.S. technology.
In a report released on Tuesday, the NCSC said the restrictions will force Huawei to find other suppliers or develop new chips, which could take years and would likely introduce new security and reliability problems. “The risk is sufficiently high for the NCSC to recommend that Huawei’s [postsanction] equipment is not used in the U.K. at all,” the report said.
Last month, BCE Inc.‘s Bell Canada announced it will buy gear from Swedish supplier Ericsson, and won’t use Huawei equipment for future 5G networks unless Ottawa permits it. Rogers Communications Inc. has also decided to use Ericsson.
Telus Corp., which said in February that it would launch its 5G service with Huawei gear, in June announced partnerships with Ericsson and Nokia, but did not back away from the Chinese company. Bell and Telus declined to comment on the U.K. decision.
If Ottawa forces them to replace Huawei gear in their existing networks, the cost could be in the billions, said Edward Jones analyst Dave Heger.
“Probably what would happen is they would have to look at taking some money away from other projects to do the rip-and-replace,” Mr. Heger said. “In the U.K., one of the things that at least has helped with the final decision is that it’s spread out over seven years, so that cost isn’t necessarily being borne all at once,” he added.
Bank of Montreal analyst Tim Casey said the transition away from Huawei gear would be manageable for the carriers – even for Telus, which Mr. Casey estimates has double the exposure. “We believe any incremental spending requirements will be manageable and will not impair dividend growth,” Mr. Casey said in a note to clients last month.
Source: The Globe and Mail, 15 July 2020.