US security concerns over Huawei result in growing R&D operations in Canada

America's loss, it seems, has turned out to be Canada's gain. Huawei has faced roadblocks selling into the US market since 2012, when a US Congressional report branded the company a threat to security, saying it could build back doors in their equipment to leak sensitive information from America to China—an allegation the Shenzhen-based company has repeatedly denied.

That left the company looking north for opportunities to expand its North American beach head. Not long after arriving in Canada in 2008, Huawei sold its telecom gear to the crown-owned SaskTel, as well as tier-one telcos Bell Canada and Telus. Former prime minister Stephen Harper said he was "honoured" at the time to have witnessed the signing of the Bell and Telus contracts.

Huawei also opened innovation centres with Telus; one at Carleton Univ in 2012 and a "5G living lab" announced last November for Vancouver that will help the city deliver on its goal of becoming the world's greenest city by 2020. In making the announcement, British Columbia premier Christy Clark said, the province is "fortunate to work with companies like Huawei and Telus on investments to expand and upgrade ICT infrastructure with the latest technology".

In the US, however, vendors like Huawei and Chinese-owned ZTE still face obstacles in selling to tier-one telcos as well as the US government.

Huawei's experience in Canada was more welcoming. Shortly after the Ottawa R&D centre opened in 2010, the province awarded the Huawei a $6.5-million Strategic Jobs Infrastructure Fund grant, leveraging Huawei's plan to invest $67 million and create 164 new jobs.

"When the province of Ontario stepped up and said we want to support the growth of your R&D operations in Ontario, there really wasn't a North American government that was stepping up making the effort to attract the company," says Scott Bradley, Huawei Canada's VP, corporate and government affairs. "That really made a difference to Huawei back then to have a vote of confidence from a North American government."

Bradley says his company intentionally adopted a low-profile approach to building its operations and trust in Canada. "We've tried to be very strategic and very realistic about how we build our business in Canada … We know it's a sensitive file," he says. "Part of our success in Canada is we have a totally open and transparent relationship with governments in Canada."

Unlike in the US, politicians here have no qualms courting Huawei investment. BC's Clark visited the company's headquarters in Shenzhen during the China Trade Mission last year, and in 2014 Ontario premier Kathleen Wynne toured Huawei's R&D Centre in Beijing. Earlier this month, Toronto mayor John Tory visited Huawei's research facility in Shanghai.

Huawei's experience in Canada could help prime minister Justin Trudeau this spring when he leads a high-level trade mission to China in hopes of forging a free trade agreement with the world's largest economy.

"Foreign-owned telecommunications companies are basically persona non grata in the US," says Peter McKinnon, an Ottawa-based industry consultant. "Whereas Canada and Ontario's support of Huawei sends a very clear message that our country is open for investment and business. I think Huawei and its partners in China will go out of their way to make the Canadian delegation feel welcome."

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