Canada Has Rolled Out Welcome Mat to Huawei, Even in Hockey

(Bloomberg) -- As parts of the world moves to ban Huawei Technologies Co. out of security concerns, Canada has embraced the Chinese company.

Australia and New Zealand have effectively banned Huawei gear from the latest generation of their mobile networks while others such as the U.K. and Germany may follow suit due to worries it could be outfitted to spy on their host nations. U.S. regulators also have moved to extend a crackdown on the company.

Instead of joining its peers, Canadian phone companies, governments and universities have all helped the Shenzhen-based company develop its 5G tech. For its part, Huawei has worked to become a stand-up corporate citizen in the country, sponsoring hockey on television, the country’s main film festival, and spending heavily on research and development.

Concerns over Huawei leapt to the fore this week after the company’s Chief Financial Officer Wanzhou Meng was arrested in Vancouver at the request of U.S. authorities, in a case in which few details have been released, though possibly linked to a probe of potential violations of Iran sanctions. She’s now facing extradition to the U.S. and China has demanded her release, renewing trade tensions between the two countries and throwing the spotlight back on security issues swirling around the company.

Telus Customer

“The concerns that have been raised by our allies are important and need to be heeded carefully,” said Christopher Parsons, research associate at Munk School of Global Affairs and Public Policy at the University of Toronto.

“The potential for not just modifying calls or ex-filtrating data from a phone call but also capturing data from sensors or manipulating data from sensors is a very real concern,” Parsons said by phone, adding that security concerns are a two-way street. “Certainly other governments also have an equal reason to be mindful and concerned about the espionage intention and capabilities of the west.”

Huawei is racing to develop 5G technology, the fifth-generation mobile network that could be 100 times faster than current technology and spur breakthrough advances in such things as autonomous vehicles.

The company is the third-biggest supplier to Vancouver-based Telus Corp., one of Canada’s top three network carriers, according to supply chain data compiled by Bloomberg. The two companies partnered on a 5G pilot last year. Huawei has also teamed with BCE Inc.’s Bell Canada on an “Internet of Things” pilot project to help improve the country’s vineyard operations.

Representatives for Telus and Huawei didn’t immediately return calls and emails seeking comment.

U.S. lawmakers have urged Prime Minister Justin Trudeau to block Huawei from 5G in Canada. The country is currently reviewing its plans for the technology. Trudeau declined on Thursday to say what Canada would do.

“The protection of our citizens and our institutions is of course of primary importance to this government,” Trudeau said to reporters during a press conference in Montreal Thursday, adding that Canada will continue to take advice from its security agencies.

Huawei employs more than 500 people in Canada. It has a research center in Ottawa and has filed more than 1,200 patent applications since 2009 and has projects with at least 10 universities across Canada, including the University of Toronto and the University of Waterloo. The company has received tax credits for research and development from the federal government, Ontario, B.C. and Quebec and said it’s ranked among the top 100 R&D spenders in Canada.

“The detainment of Huawei’s CFO doesn’t improve or worsen in any sense the security posture of Huawei with regards to Canada,” Parsons said. “But of course, politics have a life of their own and that’s where we’ll see what the opposition and other stakeholders do to try and mobilize this information.”

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