The U.S. intelligence committee released a scathing report Monday about the security risks of dealing with China's two leading telecommunications firms, Huawei and ZTE.
Mike Rogers, the head of the committee, is warning that Huawei, now operating in Canada, is a threat to national security north of the border too, the CBC's Greg Weston reported. Rogers urged Canadian companies not to work with Huawei because the two countries' telecommunications systems are so integrated that it puts the U.S. at risk.
The world’s second-largest telecommunications equipment supplier, Huawei is already providing high-speed networks for Bell Canada, Telus, SaskTel and Wind Mobile – deals that Prime Minister Stephen Harper's government has openly applauded.
The Canadian government has given itself the power to bar Huawei from bidding on a new secure federal network. On Tuesday, the prime minister's spokesman refused to say if the government will actually use that power.
National security exemption available
Andrew MacDougall says the government department in charge of computer services has invoked a national security exemption on its work. That means it can ignore trade agreements and standard government purchasing rules if it has security concerns.
"The government is going to be choosing carefully on the construction of its network," MacDougall said.
"I'm not going to comment on any one company, but I will note that Shared Services Canada said [Monday] that Canada, the government, has invoked a national security exemption in the building of its network for telecommunications, email, etc."
MacDougall wouldn't say whether the government would use the exemption on this project. It's not known whether Huawei is planning a bid.
The federal government is building the secure network after three departments were hacked in 2010.
In Saskatchewan, Huawei provides network equipment for provincially-owned SaskTel. Saskatchewan Premier Brad Wall even went to China to see that deal signed.
Wall says the province has no plans for the kind of major system the federal government is building.
SaskTel project 'too important'
"The fact is we have no plans like the federal government is talking about today. We are not tendering anytime soon, we are not changing our internal communications systems at all and so this is very much about technology that we're purchasing," Wall said.
Huawei is supplying SaskTel with some radio components, he said, "where there isn't a risk," as opposed to routers, which would access information. Cisco Systems is the main supplier for the network, which will bring high-speed LTE technology to rural Saskatchewan.
"So we are going to move forward with it. Rural coverage is simply too important," Wall said.
The premier says SaskTel has about 25 people working full time on security.Ontario Premier Dalton McGuinty also downplayed fears over the security risk.
"I don't really understand the concerns being raised south of the border and of course here in Ontario," McGuinty said Tuesday.
The premier took credit for the province spending $6.5 million in 2008 to woo Huawei, which set up shop in Toronto and Ottawa.
No way to verify Huawei system clean
"I met with Huawei representatives in China. We secured an expansion of an existing investment in Ontario — that has created, I think, a few hundred jobs. I think those are very important to us," McGuinty said.
When it comes to issues of Canada's national security, he added, he will take the advice of Ottawa — not Washington.
Ron Styles, the head of SaskTel, says the partnership with Huawei has so far worked just fine.
"A company looks at whether the equipment fits with its needs, whether the equipment is safe, reliable, and those are all things that we're quite comfortable with. We've had a great relationship with Huawei in the last two network builds," he said.
Styles gives no hint of any security problems with Huawei, but sources tell CBC News that Canada's spy agency has been keeping an eye on the SaskTel-Huawei partnership.
Styles wouldn't address that subject, saying only that they "talk to a variety of federal agencies from time to time."
The U.S. and Australia have both banned Huawei from major infrastructure projects. And the head of the U.S. intelligence committee says if Canada can't undo the deals that Huawei already has, it should at least try to minimize the security threat.
But a former top CSIS official says there is no way to police Huawei's networks once installed.
"There are just too many lines of code, there is just too much information and data available to be able to give any company like Huawei a clean bill of health and say we have verified their systems and it's fine, they can be part of our network," Ray Boisvert said.