By SEAN SILCOFF, ROBERT FIFE, STEVEN CHASE
Monday, December 10, 2018
OTTAWA -- Canada's spy agency is warning the country's top universities to be cautious about their extensive research relationships with Huawei Technologies Co. Ltd. amid growing cyberintelligence concerns about the Chinese telecommunications equipment giant.
The Globe and Mail has learned officials with the Canadian Security Intelligence Service, including assistant director of intelligence Mike Peirce, delivered the warning to research vice-presidents from a group of leading research-intensive universities known as the U15 at a meeting in Ottawa on Oct. 4.
There is at least one follow-up meeting planned with CSIS officials set to speak to about 20 McGill University academics on Dec. 19, including several whose research is underwritten by Huawei.
People who attended the October meeting described it as an information session where CSIS officials did not reveal classified information nor provide specific direction to universities, but shared their concerns about Huawei's development and deployment of next-generation 5G wireless technology across Canada.
CSIS spokesperson Tahera Mufti said the agency does meet with the U15 to discuss national security issues relevant to the group but would not discuss details of those briefings.
"The essence of [CSIS's message] was, 'We have concerns,'" about Canadian universities' research partnerships with Huawei said Martha Crago, McGill's vice-principal, research and innovation, who chaired the meeting.
"We have security concerns and we need you to recognize this is dual-use technology. It could have security implications as well as commercial applications.'" The meeting was held well before the Dec. 1 arrest of a top Huawei executive in Vancouver but came as the United States is pressing Canada and its other intelligence-sharing partners to cut ties with the world's secondlargest maker of smartphones.
Despite CSIS's warning to universities, the federal government has not followed the United States, Australia and New Zealand in banning or scaling back Huawei's access to Canada's 5G network and has only committed to reviewing the company's involvement.
Canada arrested Huawei chief financial officer Meng Wanzhou, the daughter of the company's founder, at the request of U.S. authorities, who want her to face charges of violating Iran sanctions south of the border. The arrest has sparked threats from China of "serious consequences" against Canada if Ms. Meng is not released.
A Globe and Mail report in May revealed that Huawei had established a vast network of relationships with leading researchheavy universities in Canada to create a steady pipeline of intellectual property that the company is using to underpin its market position in 5G. The company has committed about $50-million to 13 leading universities and close to 100 professors and their graduate students have worked on Huawei-funded projects, obtaining millions of dollars in government grants.
In dozens of cases the academics, whose work is underwritten by Canadian taxpayers, assigned all intellectual property rights to Huawei. Canada's Department of Global of Affairs has routinely granted export permits to Huawei allowing it to transfer the research back to China.
The extent of Huawei's inroads into Canadian universities alarmed security experts, including Andy Ellis, former CSIS assistant director of operations, who urged Ottawa to analyze the security threat and economic cost of transferring Canadian intellectual property to Huawei.
"If I was Mr. Trudeau, I would say I want all of you in the intelligence community to tell me the length and breadth of what is going on here and to recommend to me some actions that mitigate it ... [and] if we are at risk," Mr. Ellis said in May.
Vivek Goel, vice-president of research and innovation with the University of Toronto, described the CSIS meeting as a "broad and general discussion" where CSIS officials reviewed "what's happening across the globe and in more general terms the different sorts of issues around relationships across the world that might be relevant to university research and to the people of Canada."
He said the message was "we should be exercising due caution in all of our work." The brewing geopolitical tensions over Huawei and its close ties to a Chinese administration bent on establishing the country as a global superpower have left Canadian universities in a difficult position. Several employ prominent telecommunications research academics and have welcomed the funding from Huawei for their academics and students - particularly after the collapse of Canada's telecommunications giant Nortel Networks, which used to heavily fund research here.
Several universities that have sponsored research deals with Huawei stressed they work with companies that are legally entitled to operate here and take their lead from the federal government, which has given no indication they should stop dealing with Huawei.
"An individual university cannot make assessments of national security," said University of Waterloo spokesman Nick Manning.
"We have to work closely with and await guidance from the Government of Canada. If we had advice we would act on it."
Dr. Crago said the briefing from CSIS prompted her to tell McGill officials and academics of the need to diversify their sources of research funding. She also said there's a follow-up meeting with CSIS officials later this month when she hopes they can give researchers "a sense of what kind of awareness" they should have when it comes to their funding arrangements with Huawei.
Scott Bradley, vice-president of Huawei Canada, said the Chinese telecom has always acted within Canadian law.
"Huawei Canada has long understood and is aware that Canadian security officials regularly discuss the security and integrity of networks and technology with Canadian operators and Canadian universities. We fully support this dialogue taking place," Mr. Bradley said in an e-mail on Sunday.
"Huawei Canada has worked closely with our clients in the university sector to build a model of protection, oversight and transparency that has operated unblemished without a single incident in ten years. We are committed to building that success and doing whatever is required now and in the future, to continue to meet Canada's security requirements."
Three of Canada's five partners in the "Five Eyes" intelligencesharing network - the U.S., Australia and New Zealand - have banned the use of Huawei equipment in the buildout of 5G networks over national security concerns under heavy pressure from the U.S. British carrier BT Group Plc also recently said it will remove Huawei equipment from its core 4G network and not buy its new 5G technology. Industry sources told The Globe last week it would cost Canadian carriers Bell and Telus more than $1-billion if the two had to rip out and replace the Chinese supplier's gear. The two have used Huawei equipment in non-core parts of their current 4G/LTE networks and are working with Huawei to supply equipment for their 5G rollouts.
The Canadian and British governments are reviewing whether they will follow suit and join the ban imposed by their Five Eyes peers. Japanese media reported last week their country plans to ban the government from buying 5G equipment from Huawei and fellow Chinese telecommunications supplier ZTE Corp., while South Korea's SK Telecom snubbed Huawei when it unveiled its list of preferred 5G suppliers in September.
Alex Younger, head of Britain's MI6 spy agency last week said in a speech, "We need to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies and these platforms in an environment where some of our allies have taken very definite positions."
Three former Canadian intelligence chiefs have warned deployment of Huawei products and 5G technology in telecommunications networks could provide China with the capacity to conduct remote spying and maliciously modify or steal information or even shut down systems.
The chiefs of six U.S. intelligence agencies also told the U.S. Senate intelligence committee in February that Huawei's 5G technology could be used for espionage and to "exert pressure and control" on U.S. infrastructure.
Huawei, whose founder Ren Zhengfei was an engineer with the People's Liberation Army, has supplied equipment to several Canadian carriers, although they have been restricted from selling routers and switches for their core networks or government networks.
Last week, CSIS director David Vigneault warned in a speech of increasing state-sponsored espionage through technology including 5G mobile networks, and noted academics "are often less aware" or protected against potential threats.
"Hostile states typically target companies or universities that are active in emerging technology - the kind of potentially revolutionary discoveries that can bring massive profits," he said, without singling out any specific country or institution.
University of Toronto President Meric Gertler, left, welcomes Huawei CEO Ren Zhengfei to the university in the fall of 2017.
TRISTAN CANNON-SHERLOCK/UNIVERSITY OF TORONTO