Parliamentary Committee Notes: Foreign Investment And Procurement-Based Threats
Date: 2023-01-26
Classification: Unclassified
Fully releasable (ATIP)? Yes
Branch / Agency: NCSB
Regarding the Hytera Acquisition
- All foreign investments, no matter their value, are subject to national security review under the Investment Canada Act.
- Accordingly, Hytera's proposed acquisition of Norsat was subject to the national security review process under the Investment Canada Act.
- Canada's lead security agencies reviewed the transaction.
- The multi-stage review process is clearly set out in the Investment Canada Act and the law was followed.
Regarding Confidentiality under the ICA
- National security reviews under the Act are conducted on a case-by-case basis, and we listen to the advice of our national security agencies throughout the multi-step process.
- Due to the confidentiality provisions of the Investment Canada Act, I cannot comment further.
- While I cannot speak to the details of a particular review, Canadians should know that the Government actively protects Canada's national security interests, and this case is no exception.
Addressing Procurement-Based National Security Threats
- Public Safety takes the need to protect government procurement of sensitive technologies from potential hostile state actors very seriously.
- The Government of Canada purchases approximately $22B worth of goods and services each year which are both a driver of economic activity and prosperity but that could also potentially give rise to national security concerns.
- To mitigate these concerns there are very strict Government of Canada-wide policies and procedures in place that require each department or agency to identify specific security requirements related to a proposed procurement.
Background:
Acquisition of Hytera
[REDACTED], China-based Hytera Communications Co. Ltd (“Hytera”) notified the Government of Canada of it's acquisition of Norsat International Inc. (“Norsat”).
Norsat, a Canadian company, engages in the design, development, production, distribution, and in-field support of radio and satellite communications solutions used in a variety of industries. In 2011, Norsat acquired Sinclair Technologies (“Sinclair”), which produces radio and wireless communications systems.
Hytera is a Chinese manufacturer of radio systems, in particular two-way radios, for use in a variety of industries.
Section 36 of the Investment Canada Act
The Act (under Section 36) includes stringent confidentiality requirements to protect both the commercially sensitive information shared by companies during a review, as well as classified information relating to Canada's national security.
The Government is limited in what it can say publicly regarding previous reviews. The key messages provided below are consistent with previous messaging to parliamentary committees.
Addressing Procurement-Based National Security Threats
Current Government of Canada procurement operations are guided by contracting legislation, regulations, policies, standards and guidelines administered by the Treasury Board Secretariat of Canada (TBS), Public Services and Procurement Canada (PSPC), and federal government departments and agencies.
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