To preserve national security, Canada said on Thursday that it will prohibit the use of Huawei Technologies Co Ltd (HWT.UL) and ZTE Corp (000063.SZ) 5G equipment, joining the rest of the so-called Five Eyes intelligence-sharing network.
Industry Minister Francois-Philippe Champagne told reporters in Ottawa, "We plan to prohibit Huawei and ZTE from our 5G networks." "Under the proposals we're presenting today, providers that currently have this equipment will be compelled to stop using it and remove it."
Companies who do not remove their 5G equipment by June 2024 will not be paid, according to Champagne. By the end of 2027, companies who use 4G equipment must remove it.
The highly anticipated decision had been postponed due to diplomatic concerns with China. The equipment has already been outlawed by the remainder of the Five Eyes network, which includes Canada, the United States, the United Kingdom, Australia, and New Zealand.
Canada originally declared in September 2018 that it will look into the potential national security risks of using Huawei technology.
Then, in December of that year, Huawei Chief Financial Officer Meng Wanzhou was detained in Canada on a US warrant, sparking a long-running conflict with China that was ultimately resolved last September when Meng was released.
Following Meng's detention, Beijing detained two Canadians and charged them with espionage. Meng was freed on the same day as the two guys. China and Canada's diplomatic tensions have now calmed substantially. China lifted a three-year ban on Canadian canola seed imports on Wednesday, reversing a measure seen as retaliation for Meng's detention. continue reading
The decision comes after Canadian telecom operators chose to employ 5G gear from other vendors.
China has spoken out against the decision. On Friday, foreign ministry spokesperson Wang Wenbin told reporters in Beijing, "We will take all necessary steps to preserve the legitimate interests of Chinese enterprises."
The supposed security concerns, according to a spokeswoman for China's embassy in Canada, are a "pretext for political manipulation," and Canada is cooperating with the US to stifle Chinese firms.
In an interview with the Canadian Broadcasting Corporation, Alykhan Velshi, Huawei's vice president of corporate relations in Canada, said the business is still waiting to hear "what kind of national security dangers they think Huawei presents."
Huawei still employs 1,500 people in Canada, largely in research and development, and sells products such as cellphones, according to Velshi.
Requests for response from ZTE were not immediately returned.
Bell Canada (BCE.TO) and Telus Corp (T.TO), two of Canada's largest cellular carriers, signed up with Ericsson (ERICb.ST) of Sweden and Nokia Oyj (NOKIA.HE) of Finland to create fifth-generation (5G) telecommunications networks in 2020, abandoning Huawei despite employing Huawei 4G equipment.