TORONTO — Before the arrest of Huawei Technologies’ chief financial officer Meng Wanzhou in Vancouver last weekend, the Chinese company wasn’t a household name in Canada — certainly not in the league of an Apple, Samsung or BlackBerry.
However, the Chinese tech giant considered by several of Canada’s allies as a security threat has quietly established itself as an important provider of technology essential to Canada’s telecom infrastructure, a situation that is not likely to change any time soon.
Huawei’s share of the Canadian smartphone market has been tiny — about 3.8 per cent, according to market research from IDC Canada — but outside of Canada the company is a juggernaut, overtaking Apple earlier this year in smartphone sales and employing more than 170,000 people around the world.
Founded in 1987 by a former officer of the Chinese People’s Liberation Army, the company has grown at an explosive rate over the past ten years and is projected to post sales of more than US$102 billion in 2018.
For Canada’s telecom industry and the federal government in Ottawa, Huawei has long been known as an important equipment supplier — one that U.S. officials consider a significant threat to national security.
That’s largely because Huawei is a major supplier of the equipment needed for wireless networks that could potentially be used to gather sensitive information for the Chinese government.
“There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party — and Huawei, which China’s government and military tout as a ‘national champion’ is no exception,” U.S. Senators Mark Warner and Marco Rubio wrote in October in a letter to Prime Minister Justin Trudeau.
However, Canadian officials and representatives of major telecom companies have maintained that they have put safeguards in place — long ago, and before the American alarm — to ensure Huawei isn’t a security or privacy threat.
Like Canada, the United Kingdom hasn’t moved to ban Huawei from doing business with their networks — despite U.S. warnings that they may be jeopardizing the “Five Eyes” intelligence gathering partnership.
Lawrence Surtees, vice-president for communications research at IDC Canada, says Britain and Canada are the second and third most important Five Eyes partners after the United States and ahead of Australia and New Zealand.
“My take is, both Ottawa and London are in a position to say … we do lots with you in the intelligence sharing and we’re not going to jeopardize our networks. We know what to do.”
Surtees says Huawei equipment has already been used in at least five Canadian wireless networks that use fourth-generation LTE technology, and it would be expensive to replace.
Huawei is also working with Bell and Telus to develop equipment for 5G wireless networks that are expected to become increasingly vital to carriers and their customers over the next decade.
“The magnitude of the contracts that Huawei has here would be a factor, with the Canadian carriers saying to Ottawa that it’s kind of too late now,” Surtees says.
There are very few alternative suppliers of 5G network equipment to chose from, he adds.
Ericsson of Sweden, the main equipment supplier for the Rogers wireless networks, and Nokia of Finland are also global players in Canada but Surtees considers Huawei to be the market leader.
It has been in operation in Canada since 2008, and currently employs about 960 people in this country — about 600 in research and development.
Huawei’s Canadian head office is in the Toronto area in Markham, Ont. while its Canada Research Centre is based in Ottawa. The company also has research facilities in Markham, Waterloo, Ont., Montreal, Vancouver and Edmonton.
Huawei also makes smartphones for current wireless networks, sold in Canada by Bell, Rogers, Telus, and Videotron under their main brands as well as some secondary brands such as Virgin Mobile, Fido and Koodo.
David Paddon, The Canadian Press
Crime up, homicide down: Five things to know about the 2018 crime statistics
OTTAWA — New national crime data for 2018 was released Monday, courtesy of Statistics Canada, with big changes to some key indicators. Here are five things that stood out:
Crime up, but still near decades-long low
The national statistics agency says both the crime rate and its measurement of the severity of crime were up two per cent this year, the fourth straight year of increases since 2014.
StatCan cautioned the prevalence of crime and its severity remain 17 per cent lower than in 2008, reflecting a long decline in crime rates nationally. From its peak in 1991, the national crime rate declined more than 50 per cent until 2014.
The agency says the increase in the severity of crimes in 2018 was attributable to marked increases in fraud (up 13 per cent), one particular class of sexual assault (15 per cent), shoplifting (14 per cent) and theft of items worth over $5,000 (15 per cent).
Less homicide, but provinces may vary
The rate of homicides in Canada ticked down nationally by four per cent, with 15 fewer homicides in 2018 than in 2017.
But the statistics tell a different story when broken down by province. Much of the decrease in came from declines in Alberta (38 fewer) and British Columbia (30 fewer), but Ontario experienced an enormous increase in homicides — 69 more than last year.
Statistics Canada analyst Greg Moreau notes that several incidents in Toronto, including the Danforth shooting one year ago (in which two people were killed), the discovery of eight victims of serial murders, and the North York van attack (in which 10 people died) all elevated the number of homicides recorded in 2018.
The data also shows decreases in firearm-related (by eight per cent) and gang-related (by five per cent) homicides across the country, the first time they have decreased since 2013 and 2014, respectively.
Statistics Canada further notes Indigenous people continue to disproportionately be the victims of homicide. Though they make up five per cent of Canada’s population, Indigenous people were 22 per cent of homicide victims.
Sexual assault is up, and more left unreported
The rate of “Level 1” sexual assault — defined statistically as sexual assault without a weapon and without other physical harm — was up 15 per cent in 2018 over 2017. And in his article, Moreau says that rate remains “likely an underestimation of the true extent of sexual assault in Canada.”
This is the fourth consecutive year this class of sexual assault increased, and it usually makes up around 98 per cent of all police-reported sexual-assault incidents. But since these types of crimes often go unreported, the actual incidence is likely not reflected in the statistics.
In 2014, another Statistics Canada survey estimated only five per cent of sexual assaults were reported to police.
Prince Edward Island reported an increase in sexual-assault reports by over half (55 per cent, though with the number of incidents provincewide in the dozens) while Nova Scotia (42 per cent), Yukon (20 per cent) and Ontario (18 per cent) all reported increases above the national average for 2018.
Hate crimes down from 2017 peak
After the rate of hate crimes spiked in 2017 by almost 50 per cent, there was a reduction of 13 per cent in 2018. Still, hate crimes occurred at a higher rate last year than in any other year since 2009, Statistics Canada says.
Statistics Canada notes the decline is almost completely attributable to reductions in Ontario, and the number of hate crimes against Muslims halved year-over-year.
Both violent and non-violent hate crimes decreased, and hate crimes that targeted black people and hate crimes targeting people over sexual orientation both fell by double digits. The share of hate crimes aimed at Jews also fell, by four per cent.
More fraud, more extortion
Statistics Canada notes the world of scams and extortion is increasingly moving online, with the Canadian Anti-Fraud Centre flagging schemes in which scammers pretend to be from the Canada Revenue Agency as well as gift-card scams.
Overall, the rate of fraud increased by 12 per cent, and sits almost 50 per cent higher than in 2008, after growing for seven years in a row. There were over 129,400 incidents of fraud reported to police in 2018, StatsCan says.
StatCan does say the increasing ease of reporting fraud online could have contributed to the higher numbers.
There was an even more dramatic increase in extortion from 2017 to 2018 — a 44-per-cent leap, Statistics Canada says. The dynamic is the same across the country, and the rate has been increasing since 2012.
Christian Paas-Lang, The Canadian Press
Court dismisses challenge of deal that helps U.S. nab tax cheats in Canada
OTTAWA — A Canada-U.S. deal allowing Canadian financial institutions to send customer information to U.S. authorities to help find tax cheats does not violate the Charter of Rights and Freedoms, a judge has ruled.
Federal Court of Canada Justice Anne Mactavish dismissed an appeal from two American citizens, Gwendolyn Louise Deegan and Kazia Highton, who now live in Canada and have no real ongoing connection with the United States.
The U.S. Foreign Account Tax Compliance Act, or FATCA, requires banks and other institutions in countries outside the United States to report information about accounts held by U.S. individuals, including Canadians with dual citizenship.
Deegan and Highton challenged the constitutionality of Canadian provisions implementing a 2014 agreement between the countries that makes the information-sharing possible.
They argued the provisions breach charter guarantees that prevent unreasonable seizure and ensure the equality of people under law.
Mactavish concluded in her decision released Monday that although the provisions do result in the seizure of the banking information of Americans in Canada, the affected people have only “a limited expectation of privacy” in their data.
She also ruled that the provisions do not violate the charter guarantee that every person is equal under the law without discrimination based on national origin.
Under the tax arrangements, Canadian financial institutions are legally required to provide the Canada Revenue Agency with data concerning accounts belonging to customers whose information suggests they might have American citizenship. The revenue agency then hands the information to the U.S. Internal Revenue Service.
Nearly all countries levy income taxes based on residency, while the U.S. system is based on citizenship.
The U.S. considers all American citizens to be permanent tax residents in the United States for federal income-tax purposes, taxing the worldwide income of “specified U.S. persons” regardless of whether they live, work, or earn income in the United States.
“The result of this is that every Canadian resident who is an American citizen is subject to U.S. federal taxation on all of their income from all sources, wherever that income may be derived, even if he or she is also a Canadian citizen,” Mactavish says in her decision.
“Canada clearly found itself in an extremely difficult position as a result of the enactment of FATCA by the American government.”
U.S. law requires extensive financial and asset reporting, with the threat of significant penalties for failure to meet the obligations.
However, Mactavish notes, the U.S. government estimates that fewer than 10 per cent of all people who file American tax returns from outside the United States ultimately owe any taxes to Washington.
In addition, a tax treaty between Canada and the United States allows residents of Canada to receive credit for some taxes paid to the federal and provincial governments that would otherwise have been owed to the U.S. revenue service.
Deegan and Highton unsuccessfully argued the provisions require Canadian banks to transfer the information of potentially hundreds of thousands of people annually to the federal revenue agency in Ottawa without judicial authorization or any state oversight.
They said this amounts to “a massive fishing expedition and a seizure that offends every core precept of the citizenry’s … right to a reasonable expectation of privacy.”
Mactavish pointed out that the Supreme Court of Canada has found that taxpayers’ privacy interest in records that may be relevant to the filing of income-tax returns is “relatively low.”
The method used to collect this information is “minimally intrusive” and the data shared with the U.S. revenue service is afforded protection under the tax treaty between the two countries, she added.
— Follow @JimBronskill on Twitter
Jim Bronskill , The Canadian Press
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