Matthew Lombardi is a fellow with the Canadian Global Affairs Institute, focused on the impact of emerging technologies on trade and foreign affairs.
In the first months of this decade, the federal government will hand down a decision that will resonate well beyond the 2020s: whether to let Huawei Technologies Co. Ltd., the controversial Chinese telecom, help build our country’s 5G mobile networks. Saying no should be a slam-dunk, but for the fact that the choice is plagued by the terms of a 2012 bilateral trade agreement signed with China.
Without a hint of exaggeration, this decision will affect the future of every Canadian’s privacy. 5G means more than just faster internet connectivity for everything from medical devices and delivery drones to video streaming and smart home devices. The underlying 5G mobile networks are the piping of the data-intensive modern economy, and control over this underlying infrastructure represents more than a typical government procurement contract. It is a matter of national security, as the piping can be used as a Trojan Horse to spy on every piece of information that crosses the networks.
For years, Huawei has quietly penetrated the global telecommunications industry – often by bidding low, and winning government contracts by promising delivery at prices that its competitors could not match. A series of recent mishaps reveal why.
In May, a Dutch newspaper revealed that its country’s spy agency is investigating an alleged hidden back door in Huawei telecom equipment. In June, a multiyear investigation by a French newspaper revealed that Huawei had built spyware into the computer systems of the African Union headquarters in Ethiopia by supplying equipment and configuring its servers, using the back doors to steal confidential data for years. Australia and the United States, key Canadian intelligence and security allies, have led the charge to ban Huawei participation in their own 5G network infrastructure, and many western European countries have implemented partial bans.
Huawei has been able to beat its competitors on price because it is not interested primarily in making money. Because of its close ties to the Chinese government, it prioritizes expanding China’s geopolitical influence, at the expense of profit making and shareholder value.
Canadians have rightly recognized that the Chinese government cannot be trusted. From the surveillance nightmare-cum-detention camps being inflicted on minority Muslim Uyghur populations, to the emergence of Orwellian social credit scores for Chinese citizens, to the detention of two Canadian citizens in December, 2018, China has shown itself to be an untrustworthy political regime, to put it mildly.
A recent national opinion survey by the University of British Columbia testing Canadians’ opinions of the country showed a nuanced reticence. While Canadians are still broadly supportive of economic exchange between our two countries, only 29 per cent of Canadians still view China favourably, a dramatic decline from 36 per cent two years ago, with concerns about China’s cybersecurity and espionage effects within Canada top of mind.
Canada’s new Foreign Affairs Minister, François-Philippe Champagne, appears attuned to the broader issue as the 5G decision looms for his government, and has pro-actively advocated for a new all-of-society framework for dealing with China. However, the federal government is restricted, legally speaking, by the bilateral investment treaty signed in 2012 between our two countries.
In that treaty, Canada did not negotiate a broad enough security exemption, one that would allow us to ban Huawei from 5G specifically because of cybersecurity and espionage concerns. Making the right choice to ban Huawei could thus be costly, and open up Canada to a lawsuit and award of uncapped damages, including compensation to Huawei in the hundreds of millions related to reasonable expectation of future 5G earnings in this country.
The federal government must demonstrate the political courage to make such a choice, and accept the potential monetary cost as the price of safeguarding Canadians’ privacy and our country’s security. It will test Mr. Champagne’s ability to actualize such a new framework for dealing with China, one that includes academia, civil society, business, and even opposition political parties, standing with the federal government in defence of our values.