Trudeau urged to probe Chinese telecom giant Huawei’s role in Canada

Trudeau urged to probe

 Chinese telecom giant Huawei’s

 role in Canada 

May  27,  2018

Prime Minister Justin Trudeau is being urged to gather security agencies and top policy makers to determine the security threat and economic cost of transferring Canadian intellectual property to Chinese telecommunications giant Huawei Technologies.

Andy Ellis, former assistant director of operations at the Canadian Security and Intelligence Service, said he was alarmed at the extent of the inroads that Huawei has made into Canadian universities with the aim of acquiring leading-edge 5G wireless technology.

A Globe and Mail investigation published Saturday revealed that Huawei has established a vast network of relationships with Canadian universities to create a steady pipeline of intellectual property to aid in the development of next-generation mobile networks.

The concerns come in the wake of Ottawa’s decision to block Aecon Group’s takeover by a Chinese state-owned company on national-security grounds, and follows the Liberal government’s attempts since assuming office to improve trade relations with China, possibly leading to a free-trade deal.

Huawei has committed about $50-million to 13 leading Canadian universities, including the University of Toronto, the University of Waterloo, McGill University and the University of British Columbia, to fund the development of 5G mobile technology, which it has used as a basis to file hundreds of patents. Canadian university professors have transferred full rights to their inventions to Huawei in 40 instances.

Read more: How Canadian money and research are helping China become a global telecom superpower

Related: Huawei’s partnership with China on surveillance technology raises concerns for foreign users

Related: Federal government won’t block Huawei’s business in Canada

Mr. Ellis, now chief executive of ICEN Group, said the Prime Minister should assemble a team of deputy ministers and top security officials to examine what − if any − threat that Huawei poses in its drive to scoop up and patent 5G technology that draws heavily on the work of Canadian academics.

“If I was Mr. Trudeau, I would say I want all of you in the intelligence community to tell me the length and breadth of what is going on here and to recommend to me some actions that mitigate it … [and] if we are at risk,” he said in an interview Sunday.

Mr. Ellis shares the view of the U.S. and Canadian security and intelligence establishment that Huawei represents a cybersecurity danger because of its close links to China’s ruling Communist Party. It was recently revealed that Huawei is helping China’s state security apparatus spy on its Uyghur minority. Former top Canadian intelligence officials have warned that Huawei could use 5G technology for espionage, a charge denied by Huawei spokesman Scott Bradley.

A spokesman for Mr. Trudeau on the weekend deferred questions about Huawei to Industry Minister Navdeep Bains. His department said on Sunday that the Natural Sciences and Engineering Research Council grants to academics “are awarded through an independent peer-reviewed process to ensure excellence and impartiality.” It added that businesses partnering and co-funding the research “must demonstrate economic, social or environmental benefits for Canadians. Canadians can rest assured that our government will never compromise national security and will always listen to the advice of public-security officials.”

The office of Public Safety Minister Ralph Goodale said federal departments work together to ensure that there are no risks to Canada’s industry, and added that half the Natural Sciences and Engineering Research money that went to Huawei-affiliated research projects was handed out by the former Harper government.

David Campbell, a former CSIS China analyst, said some research universities may plead ignorance or practice willful blindness when it comes to potential national-security threats involving China, especially if it could affect funding.

If I was Mr. Trudeau, I would say I want all of you in the intelligence community to tell me the length and breadth of what is going on here and to recommend to me some actions that mitigate it … [and] if we are at risk.

— Andy Ellis, former assistant director of operations at the Canadian Security and Intelligence Service

“Academics in general are a trusting lot who strongly believe sharing information is a fundamental value of academic inquiry. So you have a recipe for some severe naiveté about what technologies might be filtering out of universities,” said Mr. Campbell, now a professor at Brigham Young University−Idaho.

He suggested that Canada may do well to follow the example of U.S. security agencies, which provide advice to leading American universities on national-security threats that need to be on their radar.

The Globe investigation also raised concerns about the extent to which Huawei is benefiting from Canadian university researchers – whose salaries and research are largely funded by governments – to build its 5G patent warchest. Several observers called on the government to enact changes to ensure Canada captures more of the economic value from research that it helps to fund.

“There should be a concerted policy led by the Canadian government to ensure that Canadian intellectual-property rights and security risks are protected,” said Conservative MP Tony Clement, a former industry minister. “We’re a great country, we have great minds, but if you don’t protect that, you become just a feeding mechanism for other powers to suck us dry.”

Ottawa patent prosecutor Natalie Raffoul said “the big question to be asking is, ‘How is this benefiting Canada?’ ” She suggested that Ottawa develop a framework that lays out “a certain amount of IP ownership remains in Canada, or at least profit-sharing remains with the Canadian entity” that participated in the research. This should come with strings-attached agreements through its research-granting agencies, ensuring that if research is transferred to a foreign entity, then the benefits are recouped through compulsory licensing.

Not everyone shares this assessment. Vivek Goel, vice-president of research and innovation with University of Toronto, whose institution retains IP rights to research commercialized by Huawei under its deal with the firm, said concerns about Huawei overly benefiting from Canadian research are overblown. “The IP that gets generated is just a small part really of what the big benefit for Canada is,” he said, adding that Canada also gets “resources to train people in very advanced fields” through relationships with foreign industry partners.

Mr. Goel further warned that if Ottawa puts in too many constraints about transferring ownership of university research “it will actually wind up making it less valuable” to potential investors. He added “it would be unfortunate if we took a stance of building a wall around Canada and leaving global industry out. We’re too small a market and we don’t have enough capital [domestically] to develop the intellectual property.”

However, McGill University law professor Richard Gold said universities “continue with the model of taking public monies to finance research and transfer intellectual property at pennies on the dollar to foreign firms. At the same time, these universities claim they need more public financing because they contribute to innovation in Canada. They cannot have it both ways … We should welcome foreign investment in our research enterprise, but must ensure that the bulk of the benefits do not flow outward when Canadians are footing most of the bill.”