China will be increasingly important in Canada’s economic future

Google, Microsoft, IBM, Cisco, Amazon and other Big Tech U.S. companies all have a major presence in Canada, employing our engineering talent and universities to create new intellectual property and help develop new products for the future.

In this crowd, it’s easy to overlook China. But one of China’s most important Big Tech companies, Huawei, although a relative newcomer, is also tapping into our engineering talent and universities for the same reason – the high quality of our talent and universities – and building a major presence in Canada in the process.

Huawei first established itself in Canada in 2008, opening a small office in Markham, Ontario to support the initial build for a contract it had won to build the UMTS network for Bell Canada and TELUS. But with Nortel in a state of collapse, Huawei in 2009 attracted three top Nortel scientists – Wen Tong, Peiying Zhu and Peter Ashwood-Smith – to launch its Canada Research Centre in Ottawa. “The ability to attract a globally respected group of leaders to Huawei was very important to the early start of our Canadian R&D operations, and the hiring of Peiying, Won and Peter were instrumental,” says Scott Bradley, a Huawei Canada executive. Their presence helped Huawei attract other talent from Nortel and elsewhere.

(Huawei had some past experience with Nortel. In 2005 there was talk of a possible partnership and in 2008 speculation that Huawei was trying to buy Nortel’s Ethernet division. In 2009 a group of former Nortel employees made an attempt to have Huawei acquire Nortel or become a major investor).

Today, Huawei has 275 R&D employees in Ottawa, 125 in Richmond Hill and 25 in Waterloo, and expects to have more than 500 altogether by the end of next year. It has another 300 business employees in Markham engaged in marketing, customer support and other head office activities. It also operates its Living Labs in Vancouver where, with TELUS, reported a major advance in the use of 5G technology, achieving a speed of up to 29.3 Gbps, about 200 times the maximum speed of 4G LTE technology. In 2015 Huawei ranked 29th in corporate R&D spending in Canada and expects to move up a few notches when the 2016 numbers are published.

Like its U.S. counterparts, Huawei has been developing links with Canadian universities. It has signed three-year research agreements with the University of Toronto and Waterloo University and expects to soon sign additional agreements, typically $3 million over three years, with universities in western Canada. Huawei has also co-sponsored a research chair in future wireless technologies with the Natural Sciences and engineering Council at Polytechnique Montreal, with Ke Wu, a leading scientist in wireless systems, the holder of the chair. Huawei, since 2015, has also operated its Seeds for the Future programme, in which up to 20 third-year engineering students are chosen to spend two weeks in China learning a bit about the country and spending time at Huawei.

Huawei also has links with Canadian tech companies, such as EXFO in Quebec City, a global provider of services to wireless technology companies, and has recently signed a partnership with Toronto-based BeWhere Inc. in the emerging IoT space.

In building its tech operations in Canada, Huawei has worked closely with the Ontario government. In 2010, Huawei, which then had 80 R&D employees in Canada, signed an agreement to hire 157 additional R&D employees and invest $67.5 million in R&D, with an Ontario grant of $6.5 million. In 2015, Huawei announced it would double its R&D workforce to 500 by 2020 and invest a further $300 million in R&D in the province, with a $16 million grant from Ontario, with the focus on 5G technology. In fact, the company says it plans to invest $303 million in 5G technology over the next five years.

Huawei is in Canada, Bradley says, because of Canada’s leading role in 5G, AI and machine learning, its universities, competitive ICT ecosystems in Ottawa, Toronto/Waterloo, Montreal and Vancouver and strong government support. NSERC, says Bradley, “is a huge factor in our investing in Canada.” All the major players are in Canada, in telecommunications in Ottawa, and there are strong regional ecosystems for ICT, he says, citing Vancouver as an example. For Huawei, Canada’s fit in the company’s global strategy, he says, is to be “at the leading edge of our transformational research,” with 5G an example.

China will be increasingly important in Canada’s economic future as China moves up the technology ladder. While Canada’s economic ties to China are still heavily based on agricultural, forestry and mineral products, and China’s investments in Canada dominated by the oil sands, we can expect much greater focus on technology – with Canadian companies such as Magna International, Linamar, CAE and Bombardier moving into China and Chinese companies such as Huawei, Haier and Alibaba heading this way.

Building those linkages in our tech-based world will bring more competition but should nonetheless be seen as a major opportunity if we put our minds to it.

David Crane can be reached at [email protected].


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David Crane
David Crane
David Crane is a noted commentator on Canadian innovation issues. He was previously a business and economics writer with the Toronto Star.

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