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National Defence to probe past contracts awarded to firm now tied to China

FILE PHOTO: The Chinese national flag is seen in Beijing, China April 29, 2020. REUTERS/Thomas Peter/File Photo/File Photo

The Department of National Defence (DND) says it’s investigating contracts previously awarded to a firm that now has reported ties to the Chinese government, as concerns of foreign interference in Canada grow.

Ontario-based Sinclair Technologies, which designs and manufactures communications equipment, was given contracts for DND work between 2009 and 2013. The 12 contracts, worth $252,296 in total, were for work on “antennas, waveguides and related equipment,” procurement data shows.

National Defence headquarters, Maritime Forces Atlantic, Canadian Special Operations Forces Command headquarters and CFB Esquimalt were listed as the primary end users. A department official told Global News the contracts appeared to be mainly for antenna devices that amplify and receive but don’t transmit information.

“We are aware of the concerns surrounding Sinclair Technologies. We are investigating these procurements and the way in which this equipment is used, alongside counterparts in other government departments,” a DND spokesperson said Thursday. “The government will take all measures necessary to ensure the security of our infrastructure.”

Sinclair, whose parent company is owned by a business that has ties to the Chinese government, made headlines Wednesday after Radio-Canada reported on a contract it was awarded last year for RCMP radio work.

That revelation drew criticism in Ottawa, and a promised review by Prime Minister Justin Trudeau, whose government recently unveiled a policy reset on how Canada handles investment, co-operation, competition and strategic challenges posed by China.

Sinclair Technologies has been awarded 24 government contracts by Public Service and Procurement Canada (PSPC) since 2009. Aside from the DND, Sinclair has done work for the RCMP and Fisheries and Oceans Canada. Three of the 24 contracts have been awarded to the company since 2017, when Hytera Communications bought Sinclair’s parent company, Norsat International. Two contracts given to Sinclair for RCMP work in 2013 and 2016 expired in 2018 and 2019, respectively. The Chinese government owns about 10 per cent of Hytera through an investment fund, Radio-Canada reported on Dec. 7. That firm is blacklisted over national security concerns by the United States Federal Communications Commission. The $549,637 RCMP contract that made headlines this week was awarded to Sinclair on Oct. 6, 2021, for a radio frequency filtering system. Protecting the RCMP’s land-based radio communications from eavesdropping is one of the system’s purposes. It is valid until March 31, 2024.

The RCMP told Global News in a statement Wednesday that radio frequency filtration equipment “poses no security concerns nor does it allow access to radio communications.” PSPC told Radio-Canada it did not take security concerns and Sinclair’s ownership into consideration during the bidding process.

“The contract was awarded in accordance with federal government procurement policies and regulations, and in accordance with the trade agreements. PSPC acted as the contracting authority for the standing offer Arrangement. The RCMP supported PSPC to ensure operational requirements were met,” the RCMP said. The majority of the 11 RCMP contracts awarded to Sinclair over the years were for “antennas, waveguides and related equipment.” Two contracts were given for “radio and television communications equipment, except airborne.” While some RCMP contracts have no value associated with them, one contract that was awarded in 2013 and expired in 2018 was worth $1.5 million.

Sinclair was awarded a contract for Fisheries and Ocean in 2019 to do structural and prefabricated work. The contract was worth $93,020 and expired in 2020.

PSPC, Fisheries and Oceans Canada and Sinclair did not return a request for comment by publication time.

Radio-Canada’s revelation on Wednesday comes amid growing concerns of foreign interference, including criminal charges being laid against an employee of Hydro-Quebec for allegedly spying for China.

Trudeau said in Montreal on Dec. 7 that it was “disconcerting” that federal civil servants awarded an RCMP contract to a company with Chinese government ties. He and Public Safety Minister Marco Mendicino vowed to do an assessment of the contract and its awarding process.

Conservative Leader Pierre Poilievre said on Wednesday that the contract should be “banned and reversed” by the government as soon as possible. Radio-Canada’s report is the latest in a string of stories on alleged Chinese interference and influence in Canada.

Global News reported in November that Trudeau and members of his cabinet were allegedly briefed in January 2022 that the Chinese Consulate in Toronto directed a clandestine election-interference network in 2019, which intelligence sources allege is a loosely affiliated group of Liberals and Conservatives funded by the Chinese Communist Party to help advance its political objectives in Canada.

Other intelligence sources told Global News that the consulate disbursed $250,000 through proxies to the network, which allegedly included an Ontario MPP and at least 11 federal candidates and 14 staffers.

While the briefings did not conclude that Beijing funded any campaigns directly, that’s how the issue has been interpreted at times in the political debate in the House of Commons.

Furthermore, a Spanish civil rights group, Safeguard Defenders, revealed in a recent report that there were Chinese police operations around the world, including three in Toronto and at least one in Vancouver, and the RCMP has since said it is investigating those reports.

Earlier in November, Foreign Affairs Minister Melanie Joly warned that Canadians should consider the “geopolitical risks” of doing business in China. She later released Ottawa’s long-awaited Indo-Pacific strategy last month, calling China an “increasingly disruptive global power” in a region where multiple countries are showing major economic growth.

The RCMP has said foreign interference has emerged as a priority for law enforcement, adding that it is working with at-risk sectors to improve Canada’s response and resiliency.