Canadian government suspends RCMP radio contract with Chinese-owned company

The federal government has suspended a $550,000 contract to supply the RCMP with radios made by a Chinese-owned Canadian company after backlash over the deal.

Sinclair Technologies, the supplier, is a division of Norsat International, a Vancouver company that was acquired by China’s Hytera Communications Corp. in 2017. was bought. Hytera was blacklisted by the US government in 2021 over national security concerns.

At the time, the Trudeau government approved the sale to Hytera without a formal enhanced national security clearance, a decision that drew criticism in Canada and the United States.

Alexander Cohen, communications director for Public Safety Minister Marco Mendicino, said the suspension of the RCMP-Sinclair contract took effect Thursday.

Trudeau government to explore RCMP equipment deal with ties to China

He didn’t say if that’s a prelude to terminating the contract, but Ottawa would need to secure an alternative supply of radios beforehand.

The government has come under fire in the House of Commons over the treaty, with the opposition saying it jeopardizes national security and enables foreign espionage.

Hytera, a company that sells two-way radios, is 10 percent owned by the Chinese state through a Shenzhen-based state pension fund, according to a filing the company’s lawyers filed with US regulators in 2021.

In February, the US Department of Justice filed criminal charges against Hytera, accusing Hytera of conspiring with Motorola Solutions employees to steal the American company’s digital wireless technology.

Sinclair told The Globe on Thursday that it is an independent company registered and operating in Canada and that its products “have been trusted by public safety agencies worldwide for over 70 years.”

Pam Damoff, the Parliamentary Secretary to the Public Safety Secretary, said the RCMP is conducting a review “to ensure the integrity of our infrastructure is in place”.

“Given the current geopolitical dynamics, we are taking all measures to combat foreign interference,” Ms Damoff told MPs.

The House of Commons is investigating Beijing-led interference in Canadian domestic affairs, including democratic processes. In its recently announced Indo-Pacific strategy, the government vowed to fight foreign interference from China and said the world’s second-largest economy was an “increasingly disruptive” global power.

Conservative public safety critic Raquel Dancho said Prime Minister Justin Trudeau should not only suspend the contract, but cancel it and order all Sinclair radio technology removed from RCMP operations.

“To my knowledge, they’ve already implemented much of the technology in Saskatchewan and Ontario,” Ms. Dancho said. Mr. Trudeau “has the primary responsibility for seeing that this is removed.”

Mr. Trudeau dismissed safety concerns when Hytera bought Norsat, even after a US congressional guard warned it would take over a company that supplied goods to the Pentagon.

“We would not proceed with approving investments under the Investment Canada Act unless we were certain and certain that there was no risk to national security. Period,” Mr. Trudeau said in 2017.

Michael Wessel, a member of the US-China Economic and Security Review Commission, which reports to Congress, said, “The sale of Norsat to a Chinese company raises significant national security concerns for the United States because the company supplies our military.”

Mr Trudeau was criticized by opposition parties for failing to subject the Norsat deal to an expanded national security review. The acquisition underwent a routine national security review that all foreign acquisitions of Canadian companies are subject to.

A more far-reaching investigation would have analyzed the potential impact on Canada’s defense capabilities and how the transfer of this proprietary technology outside of Canada could harm that country’s interests or those of its allies. It would also consider how the transaction could enable foreign espionage or damage Canada’s foreign relations. And it would consider the potential of the investment to hamper intelligence or law enforcement operations.

In a partially redacted indictment unsealed in Chicago this February, the US government said Hytera Communications recruited Motorola employees in Malaysia to steal proprietary commercial data on two-way radios known as walkie-talkies.

Daniel Le Bouthillier, director of media relations at the Defense Ministry, said the military is reviewing its previous contracts with Sinclair from before China took over Norsat.

“We are aware of the concerns surrounding Sinclair Technologies,” said Mr. Le Bouthillier. “We are investigating these procurements and the way these devices are being used, along with colleagues in other government departments.”

With a report from Reuters