Ladies and gentlemen, thank you for your invitation. I'll speak in English, but you may ask your questions in the language of your choice.
There is a written submission that hopefully you have received. I shall have to abstract from that submission. I co-authored that submission intentionally with my colleague, David Skillicorn, from the School of Computing at Queen's University, in order to lend greater heft to the actual security assessment of the technology.
We have long argued that Canada's strategic and policy engagement needs to be far more nuanced to reflect the complexity of a relationship that is evolving rapidly. On some matters China is a partner, on some a competitor and on some an adversary. These three challenges converge on matters of technology, security and procurement.
Our assessment of the security risk is that on the technical side they are moderate and manageable, although there are risks. The broader issue at stake is from a democratic government or procurement perspective of procuring such technology from China, and in particular from state-owned enterprises.
First, as Professor Burton has already pointed out, China is playing the long game and is engaging in predatory market practices in order to undercut other companies. You can find this well documented in a report released last month by the United States Senate Committee on Foreign Relations that goes into substantial detail on Nuctech and other Chinese technology companies and how exactly this works.
On principle, SOEs or partial SOEs from non-democratic regimes should be excluded from Canadian public tendering processes because they're not competing on a level playing field. In other words, this matter of Nuctech should be referred to Canadian competition authorities. In lieu of that referral, I suppose, we're here today having these meetings.
In case there's any doubt about just how arm's length Nuctech is, it was founded in 1997 by the son of former Chinese leader Hu Jintao, which makes him part of the notorious “princelings” of the “red royalty” that are widely despised across China. Doing business with Nuctech is bad for Canada's image, bad for China, and bad for Chinese and our image with the average Chinese.
Second, Canadian companies are precluded from competing for public procurement tenders in China. The principle of reciprocity suggests that companies that are either explicitly excluded from foreign tenders or that structure their markets so that foreign companies cannot compete should not be able to compete for federal public tenders in Canada.
Third, Canada should not be doing government procurement business with a country that engages in hostage diplomacy, bullies Canada and some of its closest allies, spreads blatant false information, engages in large-scale and systematic foreign interference, regularly flouts international laws, including endangering allied warships, and is responsible for large-scale human rights abuses on a scale not seen for decades. Nuctech is complicitous in this regard because its relations in selling equipment to the Xinjiang Public Security Bureau goes back well over a decade, as recently testified on July 20 before the Subcommittee on International Human Rights of the Standing Committee on Foreign Affairs and International Development. Therefore, Canada shouldn't be duplicitous in terms of doing business with a company that then on the other side engages in large-scale human rights abuses, and at the same time criticizing China for how it treats individuals of the Uighur minority in Xinjiang.
Fourth, the 21st century is really about data and technology, and China is doing both to enable and promote digital authoritarianism and undermine democratic values, and to actively compromise and interfere in sovereign decision-making. We are now witnessing this on a daily basis and every successful public tender for Chinese technology in Canada is an accelerant towards this dystopian future.
Ergo, Canada should be banning any Chinese state-owned enterprises, partial SOEs, or companies suspected of receiving undisclosed government subsidies, and all Chinese technology companies from Canadian federal public procurement, including standing offers. In cases where that would be in breach of Canada's international trade or legal obligations, the decision should rest with the minister, who should make that decision public.
Finally, and I conclude on this, this matter is indicative of broader issues that have long plagued federal public procurement in this country, especially on matters of security and defence. I remind the committee of the U.S. Department of Commerce's annual report on most difficult countries for military procurement, for U.S. companies to do procurement for U.S. military assets, and Canada ranks second on that list of countries most difficult to do procurement in.
That is robust outside validation of the dysfunction of procurement with which this committee should be seized. The Government of Canada has an opportunity to learn and leverage the visibility from this near-miss with Nuctech, which manifests the extent to which the broad scale and threat risk of this bilateral relationship continually outstrips the government's current tool kit in governance capacity.
This is an opportunity to realize that instead of fending off the alligator that's closest to the boat, the tool kit that enables these examples is simply not fit for purpose. However, in court we have tools to review investments against national security considerations, such as the ICA, and more are coming with respect to critical infrastructure. If there are no comparable tools in place or even under discussion for national security reviews of research and development partnerships, even for domains under the federal government's agreement, such as the tri council grant funding agencies, associate university research and national labs, such a built-for-purpose tool kit on procurement is long overdue.