Canada to ban Chinese telecoms Huawei and ZTE from 5G networks

Canada said it will move to ban Huawei and ZTE from providing 5G services in the country, in the latest move by a US ally to target the Chinese equipment telecoms manufacturers.

François-Philippe Champagne, Canada’s minister of innovation, science and industry, said on Thursday that the country intended “to prohibit the inclusion of Huawei and ZTE’s products and services in Canada’s telecommunications system”.

“Providers who already have this equipment installed will be required to cease its use and remove it,” he said. The federal government will not compensate companies for the removal of Huawei and ZTE gear, he added. Equipment used for 4G networks will also need to be removed.

The US and many of its allies have expressed strong concern in recent years about Huawei’s global expansion amid worries that the company has ties to China’s military and facilitates Beijing’s cyber espionage around the world.

“We’ve been expecting this for three years,” Alykhan Velshi, Huawei’s vice-president of corporate affairs for the Americas, told CBC, Canada’s public broadcaster, in an interview.

“We’re disappointed by the outcome, but what the government announced is the intent to introduce legislation, but right now there is no prohibition on the book for selling Huawei equipment.”

Velshi said the federal government has not told Huawei what national security threat the company’s equipment posed to Canada.

“It’s for the government to provide evidence that Huawei is a national security threat as they claim. They have not done so.”

The Chinese Embassy in Canada slammed the decision as politically motivated and said Beijing would take “all necessary measures” to protect its companies.

The embassy also said that Huawei and ZTE have strong cyber security records and Ottawa’s decision not only harmed Chinese interests but violated the principles of free trade and market economies.

The US had long urged Canada to join the other members of the Five Eyes intelligence-sharing network — which includes the UK, Australia and New Zealand — to ban Huawei from their domestic telecom networks. The UK and Australia have imposed restrictions that prohibit the Chinese company from operating in their markets.

Huawei’s network equipment is used by a number of large Canadian telecommunications companies. In December, the Chinese group said Canadian telecoms had spent more than C$700mn (US$546mn) on its technology.

The Trump administration took several actions to ban Huawei from participating in 5G networks in the US as part of an effort to hobble the Shenzhen-based company.

It also put the group on a commerce department blacklist, known as the “entity list”, which prohibited US companies from supplying technology to Huawei, and imposed additional restrictions that required any business seeing to supply Huawei with products containing US technology to apply for an export control licence.

The ban on Huawei comes eight months after Ottawa allowed Meng Wanzhou, the company’s chief financial officer and daughter of the founder Ren Zhengfei, to return to China following three years of detention in Vancouver. Meng had been detained on criminal fraud charges and was being held pending a Canadian court ruling on whether she could be extradited to the US. She was released after reaching a deal with US prosecutors.

Hours after Meng’s release, prime minister Justin Trudeau announced that two Canadian citizens who had been detained in China for more than three years — Michael Spavor and Michael Kovrig, known as the “two Michaels” — had been released.

Some experts speculated Canada had previously been reluctant to ban Huawei despite the US pressure because it wanted to make sure that it could secure the release of the two men.

Days after the release of Meng and the “two Michaels”, Trudeau said a decision on whether to ban 5G equipment made by Huawei was weeks away. But months passed before the announcement on Thursday.

“We took the time needed to do that review, consult with allies,” Champagne said. “When you deal with national security, you have to take the time to do things properly.”

The pressure on Huawei has grown in recent years as the US cracks down on Chinese companies that it believes are enabling Beijing’s espionage or undertaking activities that could threaten US national security.

The Financial Times reported this month that the Biden administration plans to impose tough sanctions on Hikvision, a Chinese surveillance camera company that has been accused of facilitating human rights abuses in Xinjiang.

Additional reporting by Maiqi Ding in Beijing and Edward White in Seoul