Huawei Says Canadian Government Can’t Freeze It Out

Huawei is confident that it will not be affected by a “national security exception” invoked by the Canadian government that allows it to discriminate against companies deemed to be too risky to be involved with the construction of a network carrying government calls, emails and data centre services.

The Canadian authorities are reportedly planning to exclude the Chinese firm from government network contracts, over fears that its links to the Chinese military make it a security risk, after a US congressional committee deemed Huawei a security risk to the US. The Canadians are apparently planning to invoke an exemption to Canada’s  international trade obligations – but Huawei says this cannot be done.

Huawei Security Fears

“The government’s going to be choosing carefully in the construction of this network, and it has invoked the national security exception for the building of this network,” Andrew MacDougall, a spokesman for the Canadian Prime Minister told Reuters. “I’ll leave it to you if you think Huawei should be a part of a Canadian government security system.”

However Huawei believes that the ruling will not affect its business in the country.

“The National Security Exemption only applies to foreign companies. Huawei is fully incorporated in Canada, and operates as a subsidiary Canadian company. This alone effectively enables us to bid on any potential procurement opportunities,” a company spokesperson told TechWeekEurope. “As would be expected of any other company, we would never speculate on specific or hypothetical business opportunities. It would be to our detriment, and to the benefit of our competitors, to indicate one way or the other what business we may or may not be bidding on.”

Huawei has 130 engineers at its Ottawa-based research and development facility and employs 300 people at its head office in Markham,Ontario.

It won a contract to build telecommunications networks for domestic operators Bell and Telus in 2008 and its services are expected to be in great demand once Canada’s auction of 4G spectrum is completed. Huawei even received a grant from Ontario Province for its research and development activities.

A recent report by the Intelligence Committee of the US House of Representatives recommended that equipment or parts made by either Huawei or ZTE should not be used by government contractors.  The committee had been investigating “the threat posed by Chinese-owned telecommunications companies working in the United States, and the government’s response to that threat.”

It concluded that neither could be trusted to be free of “foreign state influence” and that China has the “means, opportunity and motive” to use telecommunications companies for “malicious purposes.” Both Huawei and ZTE have denied that that they pose a genuine security threat to the United States’ infrastructure and have challenged the report’s findings.

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