Canadian telecom providers will have to rip out any Huawei and ZTE equipment from their 4G and 5G networks without compensation, the federal government has announced.
The long-expected announcement came from Public Safety Minister Marco Mendicino and Innovation Minister François-Philippe Champagne.
Ottawa has “serious concerns about suppliers such as Huawei and ZTE who could be compelled to comply with extrajudicial directions from foreign governments in ways that would conflict with Canadian laws or would be detrimental to Canadian interests,” the government said in a policy statement.
“Canada’s closest allies share similar concerns about these two suppliers. Given the potential cascading economic and security impacts a telecommunications supply chain breach could cause, allies have taken actions to enable them to prohibit the deployment of Huawei and ZTE products and services in their 5G telecommunications networks.”
The official ban will be part of upcoming federal changes to the Telecommunications Act. Amendments will include mechanisms to prohibit the use of equipment and services from designated suppliers where necessary to protect Canada’s telecommunications system.
Asked repeatedly by reporters why it took three years for the government to reach its decision, Champagne said this “has never been a race.”
Asked if there is evidence Huawei or ZTE equipment has been used here for data theft, Champagne didn’t answer directly. “This has been a process” to make the decision, he said, including consultations with Canada’s allies. He also cited findings from Public Safety Canada.
There will be discussions with affected telcos on the timeline for taking out the equipment. However, the ministers suggested it won’t be very expensive, saying the “vast majority” of 4G/5G networks here don’t have gear from the two providers.
The announcement is no suprise: Canada has already excluded Huawei and ZTE in sensitive areas of Canadian 3G/4G and LTE networks. Ottawa has also imposed assurance testing in independent third-party laboratories for these suppliers before they are deployed in less sensitive areas of Canadian cellular networks while restricting outsourced managed services from these companies across Canadian critical networks.
In 2020 Telus said it would begin rolling out its 5G network with an initial module from Huawei — but the equipment would be limited to the non-sensitive Radio Access portion of the network and excluded from the network core.
Telecom consultant Mark Goldberg said the decision is more about the Digital Charter and critical infrastructure framework going forward rather than what is “largely a symbolic ban on Huawei and ZTE gear, which has not been used in Canada’s 5G networks. By the time the 4G gear has to be replaced, it will have been depreciated and nearing end-of-life in any case.
“An open question is the impact on Canadian jobs and intellectual property. Huawei has significant research labs in Canada and funds research at many Canadian universities. How are these people being impacted?”
Huawei Canada said it is disappointed with the decision. “This is an unfortunate political decision that has nothing to do with cyber security or any of the technologies in question,” it said in a statement.
“Over the past 13 years, Huawei Canada has devoted itself to helping Canadian carriers build out their wireless networks and provide quality services for the Canadian people. Huawei equipment, including both hardware and software, has been routinely and closely scrutinized by the government and its security agencies according to stringent quality standards. There have been zero security incidents caused by Huawei equipment throughout this entire period. We are proud of our security record in Canada.
“Banning Huawei’s equipment and services will lead to significant economic loss in Canada and drive up the cost of communications for Canadian consumers. Unfortunately, this decision is beyond our control as a business. However, we will do everything in our capacity to protect the legitimate rights and interests of our customers, partners, and ourselves. We thank all of our Canadian partners, customers, and consumers for their ongoing support, and look forward to contributing to future network rollout in Canada when conditions permit.”
Champagne said the government is ensuring the long-term safety of the country’s telecommunications infrastructure. “As part of that the government intends to prohibit the inclusion of Huawei and ZTE products and services in Canada’s telecommunications systems. This follows a thorough review by our independent security agencies in consultation with our closest allies.”
“As a result, telecommunications companies that operate in Canada would no longer be permitted to make use of designated equipment or services provided by Huawei and ZTE. As well, companies that already use this equipment installed in their networks would be required to cease its use and remove it. The government intends to implement these measures as part of a broader agenda to promote the security of Canada’s telecommunications networks and in consultation with industry.
“Our government will always protect the safety and security of Canadians and will take any actions necessary to safeguard our critical telecommunications infrastructure.”
The use of new 5G equipment and managed services from Huawei and ZTE will be prohibited and existing 5G equipment and managed services must be removed or terminated by June 28, 2024.
Any use of new 4G equipment and managed services from Huawei and ZTE will be prohibited and any existing 4G equipment and managed services must be removed or terminated by December 31, 2027.
The government expects that telecommunications service providers will stop buying new 4G or 5G equipment and associated services from the companies by September 1st.
The government will also impose restrictions on Gigabit Passive Optical Network (GPON) equipment used in fibre-optic networks.
Medicino said the government will soon introduce a new framework to protect critical infrastructure in the finance, telecommunications, energy and finance sectors. “This new legislation will better protect systems vital to our national security and give the government a new tool to respond to emerging cyber threats.”
(This story has been updated to include comments from Huawei)