Why are we still doing business with Chinese state entities?

Diane Francis

20 July 2020

Would you buy anything from a company that kidnapped two of your employees? Or one that ignored laws and broke contracts worth billions of dollars? Of course not. But that’s exactly what Ottawa is doing.

Last week, the National Post reported that Nuctech Company, a controversial Chinese state-owned security enterprise, won a $6.8-million bid to install X-ray machines in all 170 Canadian embassies, consulates and high commissions around the world.

But this was simply Nuctech’s latest penetration of Canada’s security infrastructure. It has won four border security and customs contracts since 2017, according to Global News, which conducted a review of procurement documents.

This malpractice on the part of our government is disturbing on a number of levels. Indeed, why would any Canadian government entertain bids from a hostile state-owned corporation to provide strategic infrastructure?

The latest contract is not simply about X-ray equipment or software programs in embassies and consulates. It is about letting China provide front-line protection for all our diplomatic posts.

Nuctech will install equipment that will scan all the belongings of anyone entering into, or working at, our foreign missions, potentially providing a mother lode of data for Chinese intelligence agencies. This contract could potentially turn Canada’s diplomatic missions into listening posts for the aggressive and ruthless regime in Beijing.

Likewise, the previous border security and customs contracts awarded to Nuctech should be withdrawn and an investigation should be launched into how they were approved in the first place.

We also need to figure out if these contracts allow China to gain access to the identities, financial transactions and movements of all the people and goods that cross our borders. These represent more major security breaches, which could affect our trading partners and allies.

The recent Nuctech bid beat out bids put forward by North American companies because it had the lowest price. This is stupid criteria when dealing with government-owned entities. They should all be disqualified because they can unfairly undercut others due to the direct and indirect subsidies they receive.

Then there’s the issue of due diligence. Did anyone check out the reputation of Nuctech, which has been nicknamed the “Huawei of airport security”?

The company undoubtedly has its eye on acquiring control over Canada’s airport security systems, as it has done in a number of European countries. Speaking to Politico, a German minister said Nuctech is “using a massive low-level pricing strategy” to undercut competitors and the European Commission “must carefully analyze (airport security contracts) and guarantee that the highly sensitive personal data of our airline passengers are sufficiently protected.”

Last week, Global News asked Foreign Affairs Minister François-Philippe Champagne about the Nuctech deal. He promised to review “any possible issue relative to security or safety” and said that, “All appropriate actions (will be) taken to ensure the safety of our missions around the world.”

But this was hardly comforting. Champagne has been cozy with China, not only as a protege of former prime minister Jean Chretien, who was a great cheerleader of China, but as a borrower of $1.2 million in mortgage funds from the Bank of China to buy two apartments in London a few years ago.

This arrangement was uncovered in June by the Globe and Mail and, shortly afterwards, he remortgaged the units with a Canadian bank. But questions remain unanswered by the minister: Why borrow money from the Bank of China in the first place? Did he get more favourable terms than what Canadian and British banks were offering? And if so, did he ever stop to question why that was?

Clearly, monkeys should not be in charge of bananas, and the Canadian Intelligence and Security Service (CSIS) should investigate all Nuctech, Huawei and other Chinese entities or individuals who have insinuated themselves into Canada’s infrastructure. In June, CSIS issued a warning that Canada is seen as an “attractive and permissive target” by Chinese intelligence.

At the time, Canada’s former ambassador to China, David Mulroney, warned bluntly: “Canada is kind of a sleepy and unaware target. We don’t have the same kind of vigilance that you now see in places like Australia and New Zealand. That had better change.”

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