GLOBE EDITORIAL

Globe editorial: Why are the Liberals doing Beijing’s bidding?

The Globe and Mail

Published Tuesday, Jun. 13, 2017 5:40PM EDT

The Liberal government of Justin Trudeau has an odd take on China: Where other governments are wary of Chinese companies trying to take over their domestic technology firms, ours is happy to facilitate a quick and easy sale.

The latest example is Norsat, a British Columbia satellite communications firm whose customers include the U.S. Department of Defence, the U.S. Marine Corps, the U.S. Army, NATO, Ireland’s Department of Defence, the Taiwanese army and NAV Canada, the agency that oversees civil aviation in this country.

Ottawa has approved the sale of Norsat to a Chinese radio-systems manufacturer called Hytera, and it has done so without carrying out an in-depth review of the potential security risks.

This has shocked seasoned national-security experts in Canada, including two former directors of Canada’s spy agency (CSIS) and Canada’s former ambassador to China. All three have said the security review that Ottawa carried out was inadequate and that the sale could put Canada and its allies at risk.

The United States, understandably, is very upset about the possibility that a Chinese company, one of whose minority owners includes the Chinese government, could become the owner of the proprietary satellite communications technology used by branches of the American military and NATO.

A congressional commission on Monday urged the Pentagon and other American customers of Norsat to review their relationship with the company – something that would strike any observer as the right thing to do.

But Ottawa remains blithe. A spokesman for Innovation Minister Navdeep Bains insists that a routine screening of Hytera revealed “no outstanding national-security concerns.”

This stands is sharp contrast to Britain, which imposed strict conditions this year on the sale to Hytera of a U.K. company that makes radio systems for police, fire and ambulance departments, following an in-depth national-security review.

It also is starkly opposed to the way the Conservative government of Stephen Harper viewed the sale of Canadian technology firms to China.

In 2015, the Harper government blocked the sale of a Montreal company, ITF Technologies, which makes “fibre-laser” products that can be used for military purposes, to a Hong Kong company. ITF once did a research project with CSIS and, in a previous incarnation, sold equipment to the Canadian Armed Forces.

The Conservatives believed that allowing the sale to a Hong Kong firm that is partly owned by the Chinese government would undermine the national security of Canada and its allies by allowing China “to domestically produce advanced military laser technology to Western standards sooner than would otherwise be the case.”

But almost as soon as it took power in November 2015, the Trudeau government launched a “fresh review” of the transaction. In March of this year, Ottawa approved the deal, with conditions, based on its own national-security assessment. It has not disclosed what the assessment involved, or what the conditions are.

It was also the Trudeau government that, in February, approved the sale of a B.C. retirement-home chain to a Chinese insurance company whose owners have links to Beijing.

All of these decisions have to be placed in the context of China’s aggressive policy of insisting that national-security reviews are a form of protectionism designed to prevent Chinese companies from expanding overseas.

As well, the Liberal Party has, in the past, held exclusive fundraisers at which Mr. Trudeau met with wealthy and influential Chinese-Canadians, a questionable practice exposed by The Globe and Mail. Some of the hosts and guest had ties to China’s communist government. At at least one of the fundraisers, Mr. Trudeau was lobbied to make it easier for Chinese investors to come to Canada.

The sale of Norsat to Hytera is currently on hold while Norsat considers a last-minute rival bid from a U.S. hedge fund – a bid that Hytera is likely to match, thanks to funds provided by the Chinese state, according to one business source in the U.S.

It’s all very murky. Beijing wants Canada to drop full-fledged national-security reviews of Chinese takeovers, and Ottawa has now done that twice, each time for the sale of firms that sell sensitive technology. In both cases, the government appears to have put China’s interests ahead of those of its allies, the U.S. included. Its decisions have been unilateral and secretive, and have run counter to the recommendations of national-security experts.

What exactly is going on here? The Trudeau government has never explained its thinking. It just keeps approving and approving, while Canada’s closest allies grow more nervous. Ottawa should not allow the sale of Norsat until it can tell Canadians, and the rest of the world, that it has done a thorough and credible national-security review.