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Federal government asked why a Chinese state-owned company was awarded a contract for RCMP communications

News

Canada’s relationship with China saw major developments last week, beginning with questions surrounding Chinese government access to sensitive Canadian infrastructure, and ending with suspected Chinese surveillance balloons wafting through Canadian airspace.

Last Monday, the Standing Committee on Industry and Technology (INDU) heard from witnesses to learn why a Chinese government-affiliated company was awarded a contract to provide radio communications equipment for the RCMP. 

The company in question was Sinclair Technologies, a division of Norsat, itself owned by Hytera, a radio-systems manufacturer partially owned by the Chinese government. Hytera currently faces 21 espionage charges in the United States related to the theft of technological secrets from Motorola.  

Witnesses present were representatives of the RCMP, and Minister of Public Safety Marco Mendicino.

The tone of the questions posed to the witnesses split along partisan lines, with Conservative MPs Rick Perkins and Brad Vis hammering Mendicino about why a subsidiary of a Chinese state-owned company charged with espionage in the U.S. was awarded a contract with Canada’s national police agency. 

When asked a series of related questions, Mendicino repeated several times that Canada’s national security was never threatened and that the public service and the RCMP follow strict guidelines on awarding contracts to foreign firms. 

Sinclair Technologies’ contract with the RCMP was suspended in December after news of the contract’s existence was broken. 

Vis asked Mendicino why the contract was suspended when the contract became widely known if there was no security risk in the first place. Mendicino responded by stating the RCMP followed the correct protocols and that it is important to remain vigilant and assess threats to critical infrastructure. 

While suspended, the Sinclair contract was not cancelled outright. 

When Perkins questioned a representative of the RCMP about the contract, the representative said Sinclair was selected by Public Service and Procurement Canada (PSPC), which could not be reached for comment in time for publication. Perkins then questioned why the RCMP does not have its own process for vetting its contracts. 

“Are you not aware of Chinese state national companies that have been charged with espionage in our closest ally?” Perkins asked the RCMP representative, who responded in the negative. 

Perkins also asked Mendicino if he was aware of China’s National Intelligence Law, part of which mandated that all Chinese companies must provide access to state intelligence services. Mendicino said he was aware of the law. 

Vis and the Conservative INDU members forwarded a motion requesting all papers related to the Sinclair contract be provided to the committee for review. 

The motion was adopted in a mostly partisan vote, with four of the five Liberal INDU members voting against it, and seven others from the Conservatives, the Bloc Quebecois, and the NDP, as well as Liberal MP Han Dong, voting in favour. 

“We are not satisfied with the responses from Minister Mendicino during the Standing Committee on Industry and Technology meeting Monday afternoon,” said Vis via email. “Neither the Minister nor the RCMP representatives were able to clearly explain why, if there was no breach or security threat with Sinclair Technologies being awarded the contract for radio equipment, did they cancel the contract.” 

In an interview with The Hub, Perkins says Mendicino doesn’t seem to understand how Sinclair’s equipment could provide access to information processed through it. 

“Where those communications blinks are, that gives intelligence to the Chinese state government as to what the RCMP communication structures are like in the country,” says Perkins.

Minister Mendicino’s office could not be reached for comment, nor could other Liberal members of the INDU committee, including Chair Joël Lightbound. 

“What we have here is eight years of a failed system where this government has continued to allow Chinese state-owned enterprises to come into this country and own critical assets,” says Perkins. “Canadian taxpayers are paying to help subsidize the Chinese government to develop intellectual property in artificial intelligence for the Chinese military and it’s a consistent pattern.” 

On Thursday, three days after the INDU committee meeting about Sinclair’s contract, Minister of Innovation, Science and Industry François-Philippe Champagne vowed that university research with Chinese military scientists would be restricted going forward. 

When asked if he believes the Sinclair affair will lead to tighter scrutiny around contracts awarded to foreign firms, Perkins said he does not expect it. 

“Past behaviour dictates future behaviour, so the answer (to) that is absolutely not.”

Five things we learned this week when McKinsey came to Ottawa

News

The first week back in Ottawa after the holidays for MPs began and ended with non-stop chatter about the consulting firm McKinsey and Company.

Conservative leader Pierre Poilievre kicked off question period on Monday with five straight questions about McKinsey and cronyism and, on Wednesday, the former ambassador to China Dominic Barton appeared at a House of Commons committee to push back on these allegations.

As a former executive at McKinsey, Barton has been the subject of opposition attacks about the eye-popping amount of money the government spent on consulting contracts last year. Here’s five things we learned this week in Ottawa.

1. Barton says Trudeau isn’t one of his 50 closest friends

The most memorable exchange of the week came between Barton and Liberal MP Anthony Housefather when the two tried to pin down the true nature of friendship.

The most frequent line of attack this week from the Conservatives was that the McKinsey contracts represented cronyism, based on Barton’s relationship with Prime Minister Justin Trudeau. Barton said he had no involvement in the McKinsey contracts with the government and denied even being friends with Trudeau.

In an exchange with a Conservative MP, Barton volunteered the information that he didn’t have Trudeau’s phone number and that he had never been in a room alone with him.

Later, Housefather drilled down ever deeper, in the prosecutorial manner of House committees, giving viewers one of the oddest exchanges of the day.

“Would you say he’s one of your five best friends?”

“No.”

“One of your 10 best friends?”

“No.”

“One of your 25 best friends?”

“No.”

“One of your 50 best friends?”

“No.”

Barton also admitted that he had never been to dinner with Trudeau or exercised with him.

2. Barton says he had no involvement in obtaining government contracts

In his opening statement, Barton denied any knowledge of the McKinsey contracts with the government and repeatedly argued that the dollar value of the contract was a drop in the bucket for both the government and McKinsey.

“With all respect, I love Canada, I’m from Canada. Canada does not move the dial,” said Barton.

3. McKinsey is the focus, not other consulting firms

In question period, Poilievre has touted the full, $15 billion value of the government’s business with contractors in 2021-2022 and then pivoted to McKinsey and accusations of cronyism.

The only problem? At most, the McKinsey contracts total about $100 million and are dwarfed by contracts with other consulting firms like Deloitte, PwC, and KPMG.

NDP MP Gord Johns argued that, since some of the contracts go back to the years of the Harper government, the Conservatives are not inclined to study them.

“Why do you think this committee is not looking at all of those companies? Do you actually think they really want to get to the bottom of the outsourcing issue and how to stop it? Because right now we’re seeing millionaires getting richer on contracts off the public tax dollar,” said Johns.

4. Conservatives are not shy about attacking big business

One thing has become clear in the first week of this sitting of the House of Commons: the Conservatives are not afraid to take shots at big business.

Poilievre relentlessly hammered McKinsey during question period, and in a speech addressed directly to Trudeau on Sunday, he tied the consulting firm to the opioid crisis and referred to the companies involved in it as “scumbags.”

“You favoured policies that flooded our streets with heroin and fentanyl and you tied the hands of our police and prevented them from doing anything about it. You failed to hold the scumbag corporations who brought the drugs to our streets accountable. Companies like McKinsey, Mr. Trudeau,” said Poilievre.

In fact, the rhetoric of Poilievre and the Conservative MPs at committee was sometimes indistinguishable from that of the NDP MPs as they took turns blasting consulting firms.

“We know McKinsey’s strengths, that they’re able to swing sole source contracts and get money out of Canadians, that their weaknesses are scandal after scandal. And we know that McKinsey sees any crisis, whether it be the opioid crisis or a pandemic, as an opportunity,” said Johns, the NDP MP.

5. Barton suggested a backchannel to China

In trying to deflect accusations that he was appointed Canada’s ambassador to China because he had a cozy relationship with Trudeau, Barton explained the appointment came out of early discussions about how to free Michael Spavor and Michael Kovrig from detention in China.

Barton said he told Ian Shugart, then the clerk of the Privy Council, that Canada needed to get a dialogue going with China.

“I said, ‘let’s try a back channel group to try and get a communication going.’ And that’s the first time I had an interaction with the prime minister on that, which is, how would we do it? We’d have to set this up at the G20,” said Barton.

At the time, Barton said the situation was so bad that there was no communication with China and the government was casting about for ideas.

“It’s the greatest honour of my life to (have been the ambassador), but I did not volunteer to do it,” said Barton.