Canada's top envoy to Washington says he doesn't personally know whether the United States objected to a Chinese investor's takeover of a Vancouver company that sells sensitive satellite technology to the American military.
Ambassador David MacNaughton told a Senate committee in Ottawa on Wednesday that he thought the Americans "were consulted and they did not ask us to conduct a full review."
But he later backtracked under questioning from Conservative Senator Leo Housakos, who asked directly if the United States had expressed any national security concerns.
"They have not to me. They wouldn't necessarily have raised that issue with me," he said.
The ambassador deferred to the Prime Minister, telling senators all he knows about the issue is what Justin Trudeau has told the House of Commons.
On Wednesday, Mr. Trudeau dodged opposition demands to divulge whether Washington raised security concerns about the deal.
The Liberal government has come under fire in recent days for green-lighting the sale of Norsat International Inc. to Hytera, a Chinese telecom giant, without conducting a formal, comprehensive national security review of the deal.
Hytera is facing a lawsuit from U.S. rival Motorola, which accuses the Shenzhen-based firm of massive intellectual property theft.
A key member of a U.S. congressional watchdog agency has already warned the Norsat deal jeopardizes American national security and two former directors of the Canadian Security Intelligence Service have weighed in, saying the transaction should have been subjected to a full-scale security review.
Reading from a prepared script, Mr. Trudeau said the government had merely accepted the advice of federal security experts.
"We take the advice and feedback from our national security agencies very seriously, and based on that advice we proceeded with this transaction," he told MPs. "In this particular case, our security agencies did consult with key allies, including the United States."
The controversial takeover dominated Question Period for the second day in a row as the opposition parties pressed repeatedly for details of consultations with the United States.
"If the Prime Minister did consult the United States as he claimed, can he tell us if any objections were raised and exactly who he consulted with?" Conservative Leader Andrew Scheer asked.
Mr. Trudeau would not answer repeated questions on whom the government talked to in the Trump administration, and whether they approved the deal. The U.S. embassy in Ottawa has refused to comment on whether Washington was consulted and whether it had any national security concerns.
"Take away the speaking notes, I would encourage the Prime Minister, and just answer the question in the House: Who did they consult with?" Conservative MP Tony Clement, evidently frustrated by the lack of answers, said in the Commons.
At one point during heated exchanges, Mr. Trudeau suggested the United States and other allies had signalled their approval of the takeover, but quickly reverted back to saying national security agencies had not recommended a comprehensive security review of the Norsat deal after consultations.
The Prime Minister also offered a new defence of the decision to green-light the Norsat transaction, accusing the opposition of undermining civil servants in charge of national security.
Conservative MP Lisa Raitt shot back that Mr. Trudeau was "hiding behind the skirts" of anonymous national security experts and failing to do his job to protect a Canadian military technology from slipping onto the hands of China.
"This is not a question about trust in our national security agencies. This is about the competence and negligence within the cabinet of the Government of Canada," Ms. Raitt said. "Did any single cabinet minister on the other side give a heads-up to their counterpart in the United States and say, 'Is this a good idea, because I want to do a gut check?' "
The Investment Canada Act requires all foreign takeovers to undergo a security screening analysis. A far more comprehensive national security review requires federal cabinet approval and would analyze the potential impact on Canada's defence capabilities and interests and investigate how the transfer of this proprietary technology outside Canada as well as the possibility the transaction could enable foreign espionage or injure Canada's international interests, including foreign relationships. It would also consider the potential of the investment to hinder intelligence or law enforcement operations.
"It was the Liberal cabinet alone that chose to forgo a national security review. That is a fact," said Mr. Clement, who as a former industry minister was once in charge of the Investment Canada Act governing foreign takeovers.
Michael Wessel, a member of the U.S.-China Economic and Security Review Commission, which reports to Congress, told The Globe and Mail that "the sale of Norsat to a Chinese entity raises significant national-security concerns for the United States as the company is a supplier to our military."
He said the Liberals appear to be willing to sacrifice national-security interests of Canada's most important ally in exchange for obtaining a bilateral free-trade deal with China. He also urged the Pentagon to "immediately review" its dealings with Norsat.
The Liberals have made closer ties to China – including a potential free-trade deal – a cornerstone of its foreign policy. China has publicly deplored Canada's national-security reviews as protectionism and demanded it be part of the free-trade talks.
Since the Liberals came to power, they have been more open to investment from China in a number of key sectors of the economy.
In February, Ottawa approved the sale of one of British Columbia's biggest retirement-home chains to a Beijing-based insurance titan with a murky ownership structure in a deal that gave China a foothold in Canada's health-care sector.
In March, the government approved a Chinese takeover of a Montreal high-tech firm, ITF Technologies – the very same transaction that had previously been blocked by the former Conservative government after it became convinced the deal would undermine a technological edge Western militaries have over China.