The federal government will announce up to $40 million for Finnish telecom giant Nokia on Thursday to conduct research on 5G wireless technology in Canada.
The funding comes as Ottawa is in the middle of a comprehensive national security review of the potential involvement of Nokia91ÂãÁÄÊÓƵ™s Chinese rival, Huawei, in Canada91ÂãÁÄÊÓƵ™s eventual fifth generation mobile network.
Ottawa is also locked in a diplomatic dispute with Beijing following Canada91ÂãÁÄÊÓƵ™s Dec. 1 arrest of Huawei executive Meng Wanzhou at the request of the United States.
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Huawei, Nokia and Sweden91ÂãÁÄÊÓƵ™s Ericsson are among the top contenders to help Canada91ÂãÁÄÊÓƵ™s telecom companies, including BCE and Telus, build the country91ÂãÁÄÊÓƵ™s 5G mobile networks.
Three of Canada91ÂãÁÄÊÓƵ™s partners in the Five Eyes intelligence-sharing group 91ÂãÁÄÊÓƵ” the United States, Australia and New Zealand 91ÂãÁÄÊÓƵ” have banned the use of Huawei products in 5G network development based on fears the company could spy on behalf of China.
Federal Innovation Minister Navdeep Bains, who along with Public Safety Minister Ralph Goodale is responsible for overseeing the 5G security review, has said the analysis is not just about Huawei and is designed to assess how best to protect Canadians.
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Bains finalized the Nokia deal Thursday in Davos, Switzerland, where he91ÂãÁÄÊÓƵ™s participating in the World Economic Forum.
Canada91ÂãÁÄÊÓƵ™s ongoing scrutiny of Huawei has created concerns within the Chinese government. Lu Shaye, China91ÂãÁÄÊÓƵ™s envoy to Ottawa, warned Canada last week of possible repercussions if the government ultimately decides to bar Huawei from building the country91ÂãÁÄÊÓƵ™s 5G networks.
A Chinese foreign-ministry spokeswoman later tried to play down Lu91ÂãÁÄÊÓƵ™s remarks, by saying the ambassador didn91ÂãÁÄÊÓƵ™t mean that China intended to interfere in Ottawa91ÂãÁÄÊÓƵ™s decision-making process. Hua Chunying also told journalists in Beijing on Monday that losses would be inevitable since Huawei is a leading supplier of 5G technology, according to a transcript on the foreign ministry91ÂãÁÄÊÓƵ™s website.
Few details are available about Canada91ÂãÁÄÊÓƵ™s 5G security review but a well-placed source has said a decision is still months away.
The federal funding will back Nokia91ÂãÁÄÊÓƵ™s research work in Canada to help telecom networks meet the needs of 5G technology. The company is also developing cybersecurity tools to protect telecom networks.
The government is expected to sell the deal as a way to support more than 2,000 of Nokia91ÂãÁÄÊÓƵ™s jobs already in Canada and to create 237 new positions. Nokia Canada91ÂãÁÄÊÓƵ™s projects, valued at over $214 million, are based in Mississauga, Ont., and the Ottawa suburb of Kanata.
The issue of whether Huawei is allowed to build the country91ÂãÁÄÊÓƵ™s 5G networks has connections to a diplomatic crisis over Canada91ÂãÁÄÊÓƵ™s recent arrest of Meng, the company91ÂãÁÄÊÓƵ™s chief financial officer and daughter of its founder.
Canadian police arrested Meng at Vancouver91ÂãÁÄÊÓƵ™s airport at the request of American authorities, who are seeking her extradition on fraud allegations.
Her arrest has angered Beijing and the case is at the heart of tensions between Canada and China. The Chinese government says Meng has done nothing wrong and has demanded her release, warning Canada of severe consequences if it doesn91ÂãÁÄÊÓƵ™t free her.
After her arrest, China detained two Canadians. Michael Kovrig, a Canadian diplomat on leave, and Michael Spavor, an entrepreneur, were taken in on allegations of engaging in activities that have endangered China91ÂãÁÄÊÓƵ™s national security.
In recent weeks, China also sentenced another Canadian, Robert Lloyd Schellenberg, to death in a sudden retrial of his drug-smuggling case. He was originally handed a 15-year jail term in 2016, but the court gave him the death penalty after revisiting his case.
Andy Blatchford, The Canadian Press
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