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Government will review RCMP contract awarded to China-linked company

Justin Trudeau.

Prime Minister Justin Trudeau delivers a statement in Vancouver on Sept. 8. Trudeau said Wednesday that the government will look into an RCMP contract awarded to a firm with ties to Beijing.

Photo: La Presse canadienne / Heywood Yu

RCI

Radio-Canada investigation found contract saved less than $60,000 on radio communications equipment

The federal government awarded a contract to provide and maintain RCMP communications equipment to a company with ties to the Chinese government, Radio-Canada has learned.

The contract has security experts raising concerns about potential Chinese access to RCMP communications and data.

On October 6, 2021, the federal government awarded Sinclair Technologies a contract worth $549,637 for a radio frequency (RF) filtering system. One of the system's purposes is to protect the RCMP's land-based radio communications from eavesdropping.

While Sinclair Technologies is based in Ontario, the company has been controlled by Hytera Communications of Shenzen, China since 2017, when Hytera purchased Norsat International, Sinclair's parent company.

The Chinese government owns approximately 10 per cent of Hytera Communications through an investment fund.

The United States Federal Communications Commission (FCC) blacklisted Hytera in 2021 (new window). The FCC says the company is one of several Chinese firms that pose an unacceptable risk to the national security of the United States or the security and safety of United States persons.

Sales and imports of Hytera equipment are banned in the United States as a result.

Chinese telecommunications firm Huawei also appears on the list. Canada banned Huawei from its 5G network this year. 

Hytera Communications is facing 21 charges (new window) in an American espionage case. The United States Department of Justice has accused the company of conspiring to steal trade secrets from American telecommunications company Motorola.

The indictment alleges Hytera recruited and hired Motorola employees to obtain confidential business information between 2007 and 2020. Hytera Communications has denied all the charges in the indictment.

Sinclair Technologies' main competitor for the RCMP contact was Comprod, a Quebec-based communications technology firm.

Jawad Abdulnour, Comprod's vice-president of R&D and engineering, said Sinclair Technologies can make equipment cheaper than it did before because some of its components are now made in China, not Canada.

It's very frustrating, disappointing and worrisome, Abdulnour said in an interview. 

How is it that a government agency just goes with the lowest bidder and will give contracts to companies like that when we're talking about national security?

A sign outside the Sinclair Technologies office in Aurora, Ont. Since 2017, the company has been controlled by the Chinese telecommunications firm Hytera, which is partly owned by the Chinese government.

A sign outside the Sinclair Technologies office in Aurora, Ont. Since 2017, the company has been controlled by the Chinese telecommunications firm Hytera, which is partly owned by the Chinese government.

Photo: Radio-Canada / Marc Godbout

Radio-Canada has confirmed — through several sources with knowledge of the process who were not authorized to speak publicly on the matter — that the difference between the Sinclair and Comprod bids was less than $60,000.

An RCMP spokesperson told Radio-Canada in a media statement that installation work on the systems has started in Ontario and Saskatchewan.

Most of the time, the RCMP radio support teams carry out the installation themselves, said Cpl. Kim Chamberland in an email.

WATCH | Trudeau: 'We will have some real questions' about contract for RCMP equipment with Chinese-linked company

But the contract's call for tenders requires that the contractor provide maintenance and technical support services after the system is installed.

Chamberland told Radio-Canada that the RCMP is confident the system will remain secure.

All information, including radio frequencies, is shared securely and only with those with the appropriate level of security, she wrote.

All contractors who have access to RCMP networks and locations must obtain a security clearance according to the work to be performed.

A spokesperson for Public Services and Procurement Canada (PSPC), the department that awarded the contract, said in response to Radio-Canada's questions that PSPC did not take security concerns and Sinclair's ownership into consideration during the bidding process.

Sinclair Technologies declined to answer Radio-Canada's questions about whether its equipment contains components made in China, and whether Hytera can access RCMP radio frequencies. 

Due to customer confidentiality, we are unable to provide comment and we respectfully decline your interview invitation, Wee Er, executive general manager of Sinclair Technologies, said in an email.

Opposition leaders criticize government over contract

Speaking with reporters before question period Wednesday, Conservative Leader Pierre Poilievre called on the government to terminate the contract and called on Trudeau to take responsibility for it.

Yes, it should be cancelled, and Justin Trudeau is responsible. He's the head of government and this is a government contract, Poilievre said.

Poilievre said the American charges against Hytera should have been cause for concern about Sinclair's bid.

He added the government should limit its sources for equipment purchases.

We as a government, we as a country, should not allow countries and government-owned enterprises that are known for espionage to sell technology that is related to our telecommunications, Poilievre said.

WATCH | Government is looking at RCMP contract with China-linked company ' very carefully': Mendicino

Singh calls RCMP equipment contract with China-linked company 'shocking'

2 hours agoDuration1:07NDP Leader Jagmeet Singh responds to a report about a federal contract for RCMP communications equipment awarded to a company with ties to China.

NDP Leader Jagmeet Singh said the American government's decision to blacklist Hytera should have been a red flag for the federal government.

You would think that Canada would go through the proper protocol to make sure our information, as sensitive as it is with a federal policing agency, is not being subject to a serious threat or breach, Singh told a news conference.

I'm deeply concerned, I think that there is a real risk here, and it shows that the government did not take the appropriate steps to vet this project or the company.

WATCH | Singh calls RCMP equipment contract with China-linked company 'shocking'

Singh called on the government to make changes to its procurement process.

There needs to be a better process in place to protect our privacy and our security for our information systems ⁠— particularly given that this is now being identified as the major security risk to our country, Singh said.

Innovation Minister François-Philippe Champagne said Wednesday that the government should investigate the RCMP contract.

We need to remain more vigilant to prevent things like that, and understand the why and how something can happen at a moment where we know that we have to take care of geopolitical challenges with respect to China, Champagne said Wednesday in a media scrum.

So we need to be very mindful of what happened and I think every branch of government needs to apply that level of scrutiny.

Experts concerned about security

Conor Healy is a Canadian now based in Washington who serves as director of government research at IPVM, a security and surveillance research group. He said he's concerned about giving a Hytera-owned company access to sensitive RCMP communications.

If I worked for an intelligence agency, this is exactly the kind of system I'd want to have access to, Healy said.

Healy said the risks include eavesdropping, collection of communications data and jamming or shutting down the radio communications system.

University of Ottawa senior fellow Margaret McCuaig-Johnston, a former senior federal official and a specialist on China's science and technology, said the government should terminate the contract.

You have to be naïve, McCuaig-Johnston said. "It's like giving the key to Canada's security to Chinese actors.

It's not just about getting rid of the contract. It's also a matter of ripping out what has already been installed.

The October 2021 decision by the federal government makes Sinclair a preferred vendor for a three-year term. The agreement includes the possibility of a two-year extension option.

Marc Godbout (new window)Richard Raycraft (new window) · CBC News ·

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