Canada sidesteps conflict with Huawei, U.S.

OTTAWA Canada is the only member of the Five Eyes intelligence-sharing network that has not formally blocked Huawei from 5G networks, but it has effectively done just that, delaying a decision long enough to force telecom companies to exclude the Chinese gear maker.

The strategy allows Canada to keep on the right side of both China and the United States as they tussle over Huawei Technologies Co Ltd, say six well-placed sources with direct knowledge of the matter.

Canada and its Five Eyes allies — the United Kingdom, New Zealand and Australia — are under pressure from fellow member the United States to squeeze out Huawei on security grounds.

5G networks offer data speeds up to 50 or 100 times faster than 4G networks and are expected to power everything from telemedicine and remote surgery to self-driving cars.

Canada has been mulling whether to disbar the firm’s next-generation equipment for the better part of two years, brushing off increasing signs of industry impatience.

In June, Bell Canada and rival Telus Corp — two of the biggest wireless providers — teamed with Sweden’s Ericsson and Finland’s Nokia Oyj to build fifth-generation (5G) telecoms networks, ditching Huawei for the project despite using Huawei 4G gear.

“The absence of a solution will eventually settle all problems,” said a source directly familiar with the approach taken by the Liberals.

Rogers Communications Inc announced in 2018 it was using Ericsson 5G equipment.

Earlier this month, the Trump regime said it would further tighten U.S. restrictions on Huawei, aimed at cracking down on its access to commercially available chips.

Operators in Canada feel the U.S. curbs mean they have no choice but to sideline Huawei in 5G networks, at least for now, say the sources, who requested anonymity given the sensitivity of the situation.

“They’ve done the political calculus and said ‘The best thing for us is to do nothing and if we do nothing we don’t upset the Chinese, we don’t upset the Americans’, ” said a source familiar with what government officials are saying.

Staying on the right side of China has become an important consideration. Huawei executive Meng Wanzhou is fighting extradition to the U.S. since Canadian police detained her in December 2018.

In response, Beijing arrested Canadians Michael Spavor and Michael Kovrig, charging them with espionage. Canada says gaining their freedom is a top priority.

“If it weren’t for the two Michaels, Canada would have already said it would not be using Huawei 5G technology,” a diplomatic source said. Government officials deny the fate of the two men is linked to 5G.

In 2018, both Australia and New Zealand blocked service providers from using Huawei 5G equipment.

Two other people who have consulted with Canadian officials say they think it is only a matter of time before feds unveil a ban.

But a source directly familiar with government thinking stressed that it would not be rushed.

The office of Innovation Minister Navdeep Bains — who is formally charged with making a decision on Huawei and 5G — said it could not comment on a particular company.