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A man walks past a Huawei company logo outside the entrance of a Huawei office in Wuhan, Hubei province in this October 9, 2012 file photo.

Reuters

The Chinese telecom equipment maker accused of making products that enable Beijing to spy on foreigners says it has no intention of bidding for contracts to rebuild the Canadian government's sensitive phone, computer and e-mail networks.

What the federal government is refusing to say, however, is whether Canada will allow other contractors to vie for the job using telecom equipment made by Huawei Technologies or other Chinese firms.

This follows an unusual move by the Harper government last week where the Prime Minister's Office publicly signalled that China's Huawei wasn't welcome to bid on the task of redesigning Ottawa's secure telecommunications network.

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Huawei, a privately held firm founded by a former People's Liberation Army officer, has grown in just two decades to rival Sweden's Ericsson as the world's biggest telecom equipment manufacturer.

It's been struggling, however, to beat back allegations that it represents a security risk for foreign companies and governments. On Oct. 9 a powerful congressional committee recommended that U.S. government computer systems exclude parts made by Huawei on the grounds these could enable spying by the Chinese state, "already known to be a major perpetrator of cyber espionage."

One day later the Canadian government poured cold water on the idea Huawei might ever gain a foothold in Ottawa, announcing it was invoking a national security protocol so it could override trade deal obligations and discriminate when picking contractors to overhaul its e-mail, phone and data networks.

"I'll leave it to you if you think that Huawei should be a part of [the] Canadian government security system," Andrew MacDougall, Mr. Harper's director of communications, told reporters Oct. 9.

Huawei said Wednesday it's not really in the market for these government contracts anyway.

"Much of the project involves areas of business that we are not in, or that we are not currently pursuing here in Canada," Scott Bradley, Huawei Canada's vice-president of corporate and government affairs, said this week.

"For this reason alone, we never thought it likely – nor do we believe it was ever reasonable for anyone to assume or suggest – that Huawei would be considered as one of the primary or contracted vendors for this project."

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The Harper government's Shared Services department has been created to consolidate voice, e-mail and data networks from across more than 40 departments and agencies. It's budgeted to spend more than $1-billion a year.

In a question-and-answer note released to The Globe and Mail, Shared Services acknowledged the national security exception would bar Chinese companies from bidding on contracts to build Ottawa's secure, centralized communications infrastructure. But the department was silent on whether other bidders could employ parts made in China.

One question posed, and then answered, by Shared Services says: "The exception may preclude Chinese companies from bidding, but does it preclude Canadian companies using equipment with China-made components?"

The department ducked the question by saying only that decisions will be made on a case-by-case basis.

One telecom industry insider said they could not imagine any would-be network supplier to Ottawa proposing to team up with Huawei given the concern about the firm. "Why would you take the risk?" he said.

Last week one of Canada's former top spies spoke out against granting Huawei a foothold in Ottawa's networks. "They're linked and tied to the Chinese state, and in my view they would, when asked, facilitate the interests of the Chinese military or the security intelligence apparatus," said Ray Boisvert, former assistant director of intelligence for the Canadian Security Intelligence Service.

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