Trudeau downplays security fears in Chinese tech firm takeover

Trudeau says his government would never approve any foreign takeover if there was concern it would harm national security

Prime Minister Justin Trudeau holds a press conference at the National Press Theatre in Ottawa on Tuesday, Nov. 29, 2016. Trudeau is approving Kinder Morgan's proposal to triple the capacity of its Trans Mountain pipeline from Alberta to Burnaby, B.C. — a $6.8-billion project that has sparked protests by climate change activists from coast to coast. THE CANADIAN PRESS/Sean Kilpatrick


OTTAWA – Prime Minister Justin Trudeau sought to assuage public fears and political complaints Tuesday that the Liberal government’s decision to allow the Chinese takeover of a Canadian satellite technology company would compromise national security at home and abroad.

Hytera Communications Co. Ltd. is set to take over Norsat International Inc., which manufactures radio transceivers and radio systems used by the American military and Canada’s NATO partners.

The private Chinese firm first made a bid for the Vancouver-based technology company in 2016, triggering a review under federal law to ensure Canadian interests weren’t harmed in the foreign takeover.

It was only earlier this month that the results of the review were made public when the company said it had been informed that a formal security review wouldn’t be required.

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Trudeau said an initial government review of the takeover, required under the Investment Canada Act, unearthed “no significant national security concerns” and didn’t require any further reviews.

The national security agencies involved in the review recommended the deal to be allowed to proceed, he said.

“The review they did was adequate to give them confidence that there was no risk to national security. Therefore, their recommendation to the minister was to allow it to proceed. So we did.”

Trudeau insisted that his government would never approve any foreign takeover if there is even a hint of concern that it would harm national security.

“We would not move forward with approving investments under the Investment Canada Act if we were not assured and comfortable that there is no risk to national security, period,” he told a news conference.

“It doesn’t matter what country it’s from, it doesn’t matter what deal it is, if there’s a risk to national security, we won’t move forward.”

The deal has been the focus of a debate over national security risks and the federal government’s willingness to approve a Chinese takeover of a Canadian technology company.

It also comes as the Liberals and China pursue exploratory free trade talks; Canadian government is aiming at opening up the Chinese market to domestic producers in the face of Donald Trump’s “America First” policy on trade.

The ongoing dialogue included an agreement last week where the two countries agreed not to engage in state-sponsored hacking of each other’s trade secrets and business information.

Opposition MPs have repeatedly raised concerns about the Norsat takeover, there is unease among congressional representatives in the United States about allowing the Chinese firm to have access to sensitive defence technology.

The Globe and Mail reported Monday that the U.S. Department of Defence is reviewing all its business dealings with Norsat as a result of the deal.

Norsat makes satellite communications systems used for national security and defence purposes. It has a number of government customers in both Canada and internationally, including the Canadian Coast Guard and the Pentagon.

Trudeau said Canadian security agencies consulted American officials as part of their preliminary security screen. Last week, Norsat security holders voted overwhelmingly in favour of the takeover bid.

The deal is still subject to approval by the B.C. Supreme Court as well as other regulatory approvals and certain other closing conditions. Norsat was scheduled to apply Tuesday for a final court order to approve the deal.

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