Federal cabinet will rule soon on whether to ban Huawei from 5G

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Prime Minister Justin Trudeau says the federal cabinet will soon rule on whether to ban Huawei Technologies Co Ltd. from Canada’s 5G mobile network, now that Canadians Michael Spavor and Michael Kovrig have returned home after nearly three years in Chinese prisons.

Mr. Trudeau strongly suggested to reporters on Tuesday that Ottawa is likely to unplug the Chinese tech company from Canada’s next-generation wireless infrastructure, noting this country’s major telecoms have already opted to buy equipment from Western suppliers. Huawei’s 5G technology has been banned in other countries over fears that Beijing could use it for spying purposes.

“We have actually seen that many Canadian telecommunications companies, if not all of them, have started to remove Huawei from their networks and are moving forward in ways that doesn’t involve them as a company,” he said. “We will no doubt be making announcements in the coming weeks.”

The Prime Minister linked the coming decision to the release of the two Michaels, who were freed Friday after Washington and Beijing cut a deal that allowed Huawei’s chief financial officer, Meng Wanzhou, to return home as part of a deferred prosecution agreement.

Mr. Trudeau indicated that the Huawei decision will be part of a wider review of Canada-China relations, which hit their worst point since the 1989 Tiananmen Square massacre after the two Michaels were arrested in Dec. 2018. They were accused of spying, in apparent Chinese retaliation for Canada detaining Ms. Meng on a United States extradition request. The Americans had accused her of bank and wire fraud relating to violations of U.S. sanctions against Iran.

“Obviously it’s very good news that the Michaels have been returned to Canada,” Mr. Trudeau said. “As we develop our plan for governing, as we pull together on our positioning, this [case of the Michaels] will have an impact and we will look forward to sharing a decision on many different issues, including telecommunications and Huawei.”

In a sign that Ottawa is taking a tougher approach to China, the federal government ordered a Chinese state-owned telecom in August to cease operating in Canada over national security concerns. China Mobile was told to either wind up its subsidiary, China Mobile International Canada (CMI Canada), or divest itself of the business. The order came to light after the telecom challenged it in court on Sept. 7.

In July, the government unveiled revised guidelines laying out new areas of concern for Ottawa as it scrutinizes foreign takeovers and investments in key sectors of the economy, as well as funding of high-end research. The move was in response to concerns raised by the Canadian Security Intelligence Service about the loss of intellectual property and sensitive technology to foreign countries such as China.

After the arrest of the Michaels in late 2018, the federal government rebuffed questions about whether it would follow key allies and ban Huawei, saying it was still conducting a cybersecurity review of 5G.

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

The Canadian 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 required to rip out and replace it immediately.

The Globe has reported that Ottawa will recommend performing tests on equipment from all 5G suppliers for security flaws, even if Huawei is banned.

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

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. 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.

U.S. national-security agencies, as well as three former directors of Canadian spy agencies, have said that Huawei can’t be trusted and that Canada should bar it from being allowed to supply infrastructure for the country’s 5G network. The Globe has reported that CSIS and the Canadian military have recommended that Ottawa prevent Huawei from selling its 5G equipment to domestic firms.

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

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