Barring Huawei won’t fully protect Canada’s 5G wireless networks, report says

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China’s Huawei Technologies Co. Ltd. presents a host of cybersecurity and geopolitical concerns that will almost certainly lead Ottawa to ban its equipment from Canada’s fledgling high-speed 5G networks, according to a digital-rights watchdog.

However, a Canadian government decision to unplug from Huawei is not sufficient to protect the country’s telecommunication networks, says the University of Toronto’s Citizen Lab, which conducts research on cybersecurity issues.

In a report on Huawei and 5G technology, the Citizen Lab urges Ottawa to conduct cybersecurity tests on all 5G equipment from all suppliers, regardless of country of origin; to encourage Huawei’s Western competitors to conduct research in Canada; and provide defensive briefings to Canadian universities about the risk of research partnerships with companies that may be a risk to national security.

The advice from the laboratory based at the University of Toronto’s Munk School of Global Affairs and Public Policy comes as Canadians await a decision from Ottawa on Huawei.

Christopher Parsons, the author of the Citizen Lab study, said he expects Ottawa to bar Huawei, particularly since Washington cut off the Shenzhen-based company from a key source of semiconductors made with U.S. technology.

“I think the government will have a strong justification on the basis that the contemporary next-generation infrastructure that Huawei is producing will be much more difficult to secure in the absence of having access to American intellectual property that is under sanction by the United States,” he said.

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For more than two years, the federal government has rebuffed questions about whether it will follow key allies and ban Huawei, saying it is still conducting a cybersecurity review of 5G. Opposition parties adopted a motion in the House of Commons last month urging Ottawa to decide by mid-December. The minority Liberal government is not bound by the motion, and most Liberal MPs voted against it.

Although the government has not indicated when a decision might be announced, a senior government official who is deeply involved with Ottawa’s cybersecurity review told The Globe and Mail the review will recommend testing equipment from all 5G suppliers for security flaws even if Huawei is banned. The Globe is not identifying the source because they are not authorized to talk about the process.

Currently, Huawei equipment is tested in Canada at independent labs for cybersecurity vulnerabilities. Canadian wireless networks have included Huawei technology for more than a decade, but Ottawa has forbidden it in the core, or brain, of the networks.

Government cybersecurity experts in countries such as Australia and the U.S. have said Huawei has no place in 5G networks because of a difference between 5G technology and previous mobile infrastructure. In 3G and 4G networks, the core was heavily protected and separated from the edge of wireless networks. Australia and the U.S. say as 5G networks evolve, the distinction between the core and edges will disappear, with sensitive operations taking place much closer to the end user to deliver the promised high speeds.

Mr. Parsons has held discussions with senior security officials in Ottawa and he says in the report that all next-generation 5G gear must be tested because foreign adversaries are constantly trying to exploit Canada’s networking infrastructures.

“A robust and vendor-neutral approach is required,” Mr. Parsons wrote in the study, to be released on Tuesday.

Officials for Canada’s major telecommunications companies told The Globe previously they also expect Ottawa to bar Huawei. BCE Inc., Telus Corp. and Rogers Communications Inc. have opted to use 5G gear from Finland’s Nokia, Ericsson of Sweden or South Korea’s Samsung.

The telecom executives said they believe Ottawa will give them two to three years to phase out their current Huawei phone gear, because it is unlikely the government will compensate them for the billions of dollars to rip out and replace it.

Canada is the only member of the Five Eyes intelligence-sharing alliance – which also includes Australia, Britain, the U.S. and New Zealand – that has yet to ban or restrict the use of Huawei 5G mobile gear. In October, Sweden barred the equipment from its networks, a decision that is under a legal appeal from Huawei. Other countries building 5G networks without Huawei participation include Japan and Taiwan. India is reportedly phasing out Huawei equipment as well, amid a border dispute with China. Germany and France have encouraged their telecom companies to look elsewhere, while Huawei was shut out of a recent tender to supply 5G cellular technology in Italy.

Although the Citizen Lab report doesn’t take a stand on whether to ban Huawei, it notes that the ruling Chinese Communist Party has “influence over how companies operate internally and externally” in China, and the risk that presents.

Beijing considers Huawei to be its high-tech jewel, and has showered it with money, allowing the company to compete globally in way that makes it difficult for companies in democratic countries to compete.

“This uneven competition playing field includes the presence of Chinese trade barriers that inhibit non-Chinese telecommunications vendors from widely selling products in China and the availability of state-backed, low-interest loans,” the study said. “As China becomes increasingly assertive internationally, it might use any country’s dependence on Chinese telecommunications vendors’ products as a bargaining chip in diplomatic or trade negotiations.”

Mr. Parsons noted that Canadian politicians haven’t looked seriously at Huawei, unlike the U.S. House of Representatives intelligence committee, which said in 2012 that Communist Party officials and Huawei’s Chinese executives have undue influence over the company’s U.S. affiliate.

The report outlined warnings from U.S. and other allies about Huawei equipment. It noted that Britain’s Huawei Cyber Security Evaluation Centre found that the Chinese equipment was “very, very shoddy” and had “engineering like it’s back in the year 2000.”

Mr. Parsons’s report urges a comprehensive national security policy that includes funding to encourage trusted 5G suppliers to invest in research and development in Canada, including in partnerships with universities. Huawei has long had a relationship with universities in which it pays for research and obtains rights to the intellectual property.

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