Law to fight cyberattacks being prepared

Announcement comes as China defends Huawei, now banned from 5G network

After banning Huawei and ZTE from Canada’s next generation of high-speed networks, the Liberal government says it will soon propose a new law to protect against cyberattacks on telecommunications platforms and other sensitive sectors like energy, banking and health care.

Few details were available the day after the Trudeau cabinet finally made a decision to follow the lead of its main security allies and bar Huawei on national security grounds and promised additional legislative changes.

Public Safety Minister Marco Mendicino said in an interview Friday that the government does not intend to compensate either Huawei or the Canadian telecom companies that need to comply with orders to rip out Huawei gear by 2027.

It does, however, intend to amend the Telecommunications Act to create an “evergreen” list of suppliers deemed a risk, that cabinet could expand on through regulation and orders-in-council.

And although Mendicino acknowledged there are already laws that protect critical infrastructure, he intends to introduce a separate new law that will focus “on cyber and telecommunications where many essential sectors operate.”

Among those, Mendicino listed telecommunications, energy, finance and banking, transport and health care. “We have to be sure that we have sufficient tools in place to protect against those emerging threats to our national security.”

The government has also extended the 5G ban to ZTE, a partially Chinese-state owned company, saying it has “serious concerns” about suppliers who could be compelled to follow the orders of a foreign government acting against Canada’s interests. The U.S. says Huawei could be forced to spy for the Chinese government — charges the Chinese government flatly denies.

Although it has refused to detail how Huawei poses a risk, Prime Minister Justin Trudeau on Friday insisted the decision was made to “ensure the safety of Canadians as the world moves towards 5G which will surround us even more with devices connected to the internet. We need to make sure that we’re keeping Canadians safe and secure into the future,” he told reporters in Sept-Îles, Que.

One analyst, Shuvaloy Majumdar, a former foreign policy adviser to Stephen Harper, said Canada waited too long to ban Huawei and is now lagging behind its allies in building up its security infrastructure.

China’s reaction to the ban was swift.

The government is using national security as a “pretext” to violate “market economy principles and free trade rules,” the Chinese embassy in Ottawa said in a statement that echoed comments made by the foreign ministry in Beijing.

It warned that the “erroneous actions of the Canadian side will certainly harm Canada’s own interests and international image,” and said China will “take all necessary measures to protect the legitimate and legal rights and interests of Chinese enterprises.”

Canada has a foreign investment and protection agreement with China. However, it is not clear if its narrowly drafted national security provisions could exempt the federal government’s actions from a legal challenge by Huawei, ZTE or China.

Canada’s closest allies — the U.S., the U.K. and Australia — have banned Huawei, and New Zealand, the fifth partner with Canada in the “Five Eyes” security intelligence network, has restricted Huawei’s use in 5G by one provider but stopped short of an outright ban.

Huawei Canada spokesperson Alykhan Velshi said Friday the company will take the time to review the promised legislation once it is introduced, but declined to comment on whether it is contemplating a legal challenge.

Huawei has already shifted most of its business lines in Canada. It spends $300 million a year on research and development into telecommunications. In 2020, that put the company at No. 18 of the top 100 business spenders on R&D in Canada. It also sells consumer products like laptops and cellphones — none of which are affected by the 5G ban, he said.

Velshi also said Huawei continues to provide software updates for its hardware that is currently installed in Bell and Telus 4G and 5G networks — but which the government has now ordered companies to remove. Rogers had already removed Huawei equipment in its cell networks.

However, Bell and Telus had vowed in 2020 to cease buying new Huawei gear and are gradually replacing it with Nokia, Ericsson or Samsung equivalents as the equipment needs replacing.

The Liberal government publicly denies it waited years to make a decision because of the long running dispute with China over Canada’s 2018 arrest of Huawei executive Meng Wanzhou — which led China to arbitrarily detain two Canadian men Michael Kovrig and Michael Spavor.

However, senior government sources have confirmed to the Star the government did not want to further put the men at risk. China had also banned Canadian canola, beef and pork imports. The final ban on canola products was lifted earlier this week.