TORONTO: The Canadian government on Thursday tabled a bill to update security measures for foreign direct investments (FDI) into the country, even as it cancelled a contract with a telecommunications company over ties with China.
Amendments to the Investment Canada Act (ICA) were moved in parliament, the most significant review in over a decade meant to address “evolving national security concerns,” according to a release from Innovation, Science and Economic Development Canada.
While the announcement did not specifically mention concerns over Chinese government-linked companies participating in sensitive Canadian sectors, it came just as the federal police, the Royal Canadian Mounted Police (RCMP), suspended a contract for radio frequency (RF) equipment over the company’s links to Beijing.
The move followed a Radio-Canada report that the equipment was supplied by Sinclair Technologies, which is based in Ontario, part of Norsat International, which is owned by Chinese telecommunications firm Hytera. About 10% of Hytera is owned by the Chinese government through an investment fund.
The contract was criticised by Canadian Prime Minister Justin Trudeau a day earlier, when he told media the government had to focus on “finding out first of all what needs to be done to ensure that our communications technology is secure, but also make sure we’re figuring out how this could continue to happen and make sure that Canada is not signing contracts with the lowest bidder that then turn around and leave us exposed to security flaws”.
The three-year contract, awarded in 2021, was worth CA$ 549,637.
On Thursday, public safety minister Marco Mendicino told reporters that as the contract was suspended, the RCMP was “in the process of both reviewing the manner in which this contract was awarded, as well as mitigating against any risks”.
Thursday’s amendments to the law governing national security reviews of procurement are the first such changes since 2009.
“While our government continues to welcome foreign direct investment, we need to be vigilant and protect Canadian interests,” François-Philippe Champagne, minister of innovation, science and industry, said in the statement.
Foreign affairs minister Mélanie Joly told reporters, “I said in the Indo-Pacific Strategy that we need to put the national lens on our contracts and our decision-making. This is the position of the Government going forward.” That Strategy, released last month, underscored the challenge China poses for Canada.
According to Radio-Canada, the US Federal Communications Commission (FCC) blacklisted Hytera in 2021, months before Canada signed the RF contract. The FCC described it as a Chinese company that posed “an unacceptable risk to the national security of the United States or the security and safety of United States persons.”
Separately, Canada’s department of national defence has started looking into another contract for 12 antennas for two naval bases given to Sinclair Technologies.
