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Toronto: The Canadian government submitted a bill on Thursday to update security measures for foreign direct investment (FDI) entering the country, even as it canceled a contract with a telecommunications company over its relationship with China.
Amendments to the Investment Canada Act (ICA) have been brought before Parliament in the most significant review in more than a decade to address “evolving national security concerns,” according to a release from Innovation, Science and Economic Development Canada.
While the announcement did not specifically address concerns about Chinese government-linked companies involved in sensitive industries in Canada, it comes as federal police, the Royal Canadian Mounted Police (RCMP), suspended the company’s radio frequency (RF) equipment contract. Link to Beijing.
The move comes after Radio-Canada reported that the equipment was supplied by Ontario-based Sinclair Technologies, which is part of Norsat International, a unit of Chinese telecommunications company Hytera. The Chinese government owns about 10 percent of Hytera through an investment fund.
The contract was criticized a day earlier by Canadian Prime Minister Justin Trudeau, when he told the media that the government must focus on “figuring out first what needs to be done to make sure our communications technology is secure, but also make sure we” Re-figure out how this continues to happen, and make sure Canada doesn’t award a contract to the lowest bidder, then turn around and leave us exposed for security breaches.”
The three-year contract, awarded in 2021, is worth $549,637.
On Thursday, Public Safety Minister Marco Mendicino told reporters that because the contract was suspended, the RCMP “is reviewing the manner in which the contract was awarded, as well as mitigating any risks.”
Thursday’s amendment to the procurement national security review law is the first such change since 2009.
“While our government continues to welcome foreign direct investment, we need to remain vigilant and protect Canada’s interests,” Innovation, Science and Industry Minister François-Philippe Champagne said in a statement.
Foreign Minister Mélanie Joly told reporters, “I said in the Indo-Pacific strategy that we need to put a national perspective in our contracts and in our decisions. This is the government’s position going forward.” The strategy, released last month, highlighted China Challenges to Canada.
Canada signed the RF contract months after the U.S. Federal Communications Commission (FCC) blacklisted Hytera in 2021, Radio-Canada reported. The FCC described it as a Chinese company that “posed an unacceptable risk to US national security or the safety of Americans.”
Separately, the Canadian Department of Defense has begun work on another contract to supply 12 antennas to Sinclair Technologies’ two naval bases.
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