The best time to plant a tree was 20 years ago.
The best time to plant a tree was twenty years ago. The second best time is today.
This is a well known Chinese proverb and it came to mind this week when Prime Minister Trudeau ridiculously chastised the RCMP for their contract with a communications company linked to a state-controlled Chinese enterprise. The issue was serious, but the comment was ridiculous because the Trudeau government allowed this situation to happen.
The RCMP contract for sophisticated communications equipment was awarded to an Ontario company, Sinclair Technologies, which had been acquired by a BC-based company in 2011. Richmond-based Norsat International acquired Sinclair to expand their product line as their domestic and international reputation grew in this very strategic industrial sector. Both companies are highly regarded and have earned positive international reputations with allied security services over the course of several decades.
The problem, however, is that the Trudeau government allowed Norsat to be acquired by Hytera in 2017. Hytera is a Chinese state-controlled enterprise that was already on the radar of security agencies globally in that timeframe. Therefore, while the RCMP in 2022 appeared to be contracting with Ontario-based Sinclair, it was actually indirectly dealing with Beijing because of the Hytera transaction in 2017.
Prime Minister Trudeau called the RCMP’s decision “disconcerting”, but what the PM should find concerning is that he allowed this to happen years ago despite many warnings not to.
Given the sensitive nature of telecommunications products and services to military, intelligence and security agencies, the Hytera-Norsat transaction was flagged by both Canadian and American security agencies back in 2017. In fact, a prominent American trade official (appointed by the Democrats and therefore connected with trade challenges with the Trump administration) chastised Canada for allowing this transaction to happen given the fact that some sensitive agencies of the United States government had existing contractual relationships with Norsat. Despite these warnings, the Trudeau government leaned forward and watched the deal happen.
I will say that I am also very concerned by the fact that the RCMP - our national police force - knew about the ownership structure of Sinclair and proceeded with awarding the contract anyway. They should have known the concerns that would stem from this contract both in Canada and the United States. Interoperability is the name of the game in security and that is something that could be impacted by this contract. Perhaps there were domestic-content requirements in the tender that forced this outcome. Perhaps there was a specific technical need that could only be fulfilled by Sinclair’s offering. Perhaps it was the lowest-cost compliant bid. Regardless of the reason for the tender, the RCMP should know better and so should the Trudeau government. Lowest cost compliance is the cornerstone disruptive business strategy for Chinese corporations in these key sectors.
The Trudeau government has long been out of step with our strategic 5 Eyes allies when it came to green-lighting strategic acquisitions of Canadian technology companies by Chinese corporations. It began in 2016 with the Liberal reversal of the previous Conservative government’s decision to block the sale of Québéc-based ITF Technologies. ITF was a leader in the design and manufacture of lasers and optical sensors. It continued with stubborn refusals to bar Huawei from the expansion of the Canadian 5G infrastructure despite consistent calls from the Americans. And it was again front and centre in the Hytera-Norsat deal. In fact, at the time the Prime Minister was heavily criticized for not even conducting a full national security review of the deal and later trying to obfuscate on issues of national security.
When he came to office in 2015, Prime Minister Trudeau held a terribly naive view on the communist government in China and was intent on ramping up ambition for more trade and engagement with Beijing at the very time that China was ramping up the very worst elements of communist ideology with party-control, human rights abuses and influence operations at home and around the world. This was part of his ‘Canada is Back’ rally-cry that dreamed of a free trade agreement with China and suggested warming relations with countries like Russian and Iran. All of these have been very bad bets and fortunately, is he now backing away from all of it.
To be fair, the western world itself was naive for a little too long. The demoncratic, free-trading world tried very hard to engage the Communist Party leadership in China as it experienced unprecedented growth in manufacturing capacity, wealth creation, infrastructure building and military build-up. The conventional wisdom was that growing trade, increasing development aid and promoting more diplomatic engagement with Beijing would eventually lead to an increased commitment on their part to human rights, the rule of law and a shift towards democracy.
I saw this from my front row seat in the corporate community in Toronto as the global business community in Canada saw nothing but tremendous economic opportunities in China and became somewhat blind to the lack of progress on the values front. I also saw this in my first two years as a Member of Parliament and Parliamentary Secretary for International Trade when we negotiated a Foreign Investment Protection and Promotion Agreement (“FIPPA”) with Beijing and my own experience combined with new exposure to her realities on the ground in China led me to focus on the “protection” part of the agreement over the “promotion” part that many were excited about.
While the flurry of recent announcements by the Trudeau government in the last two months may be many years late, lack critical details or appear to be rushed, they are all welcome steps forward after many steps backward. The new Indo-Pacific strategy from Minister Joly, new foreign investment rules from Minister Champagne, the awkward G20 exchange between Prime Minister Trudeau and President Xi Jinping and even the so-called ‘Freeland Doctrine’ are all in our national interest and all things Conservatives have been advocating for many years. Perhaps that shows the importance of an opposition in a democracy. The government is now reasserting the need for balance between our interests and our values when it comes to crafting foreign policy. The second best time to plan the tree is today, so lets hope it begins to take root.