No feedback on Chinese takeover deal: ambassador

• Canada’s ambassador in Beijing says he’s heard no chatter from Chinese officials about security concerns around the Chinese takeover of a Canadian tech firm.

“I have not heard it mentioned yet. … On the Chinese side, I have not heard a comment,” said John McCallum, speaking to the National Post by phone Tuesday evening.

But Canada is “always open to foreign investment” from China and other countries, he said. Business deals are assessed on a “caseby- case” basis and, in this case, “security advice was followed,” he added, citing comments from Innovation Minister Navdeep Bains on Tuesday.

Bains had told reporters “every single transaction” is reviewed by national security agencies and “we followed their advice” when Chinese firm Hytera made a bid for B.C. firm Norsat. But the Investment Canada Act only requires screening, not a full-fledged review, and that’s what happened in the case of Norsat, the company said.

Concerns have been raised in the United States over American military use of satellite technology from Norsat now that a Chinese communications giant could have a controlling interest. Motorola Solutions had sued Hytera in March over allegations employees that transferred to the firm brought trade secrets with them.

The implicit worry is that firms based in China could transfer sensitive technology to the Chinese government, for use by its military. The sale has not yet been finalized and an American firm is also bidding for ownership.

Accused by Conservatives of being “willing to jeopardize our security interests” in view of a trade deal with China, Prime Minister Justin Trudeau said in the House of Commons Tuesday Canada had specifically consulted the United States on the Norsat acquisition. Bains said he would not “divulge the specifics” but “I can assure you that we engaged with our allies.”

Hounded in question period again Wednesday by Conservative leader Andrew Scheer, Trudeau called his government’s oversight “detailed” and “scrupulous,” restating that the U.S. had been consulted.

“We will never compromise on national security,” he said.

Conservatives asked the prime minister over and over with whom exactly he had spoken in the U. S., and whether he would table relevant documents, but Trudeau wouldn’t answer. Tory MP Tony Clement boiled it down to Liberals “trying to appease Chinese foreign interests.”

To maintain that appeasement, “they are hiding behind the skirt of the national security agencies,” said Lisa Raitt.

Other Chinese acquisitions have recently made headlines: Liberals approved the sale of Montreal’s ITF Technologies to a Chinese firm in March, and gave Chinese insurance giant Anbang the go- ahead to purchase a B.C. retirement home chain in February. Anbang’s chairman is reported to have been detained by Chinese authorities last week, which Bains said Tuesday was “very concerning.”

There is increased interest from China all around, McCallum said. “The stars are aligned in such a way that both sides want to make progress,” he told the Post, though acknowledging “there are issues involving human rights and that kind of issue on which we don’t agree.”

In particular, as evidenced by a recent delegation led by natural resources minister Jim Carr, Canada is pivoting to China as a market for softwood lumber after an American tariff was slapped on Canadian products, one of several areas being worked on concurrent to exploratory trade talks.

“I think there is strong appetite in China for Canadian wood,” McCallum said. Tourism, clean technology and agri- food are other areas of focus, he said.

If a free trade agreement with China proceeds, it would be their first with a G7 country, McCallum noted, and “we want this trade deal to reflect our own values and priorities.”

He said Canada wants a “progressive deal” including chapters on the environment, labour and gender should it be negotiated. “It’s not clear at this point whether the Chinese side is on-side with all of those things,” McCallum explained.

Another ask from Canada will be access to Chinese government procurements. “They have not always been the most open on that to Canada and to other foreign countries, so that’s one of the issues we want to put on the table,” he said.