Canada stays silent on national exemption scope

Canada is not saying whether it will block Chinese firm Huawei from bidding on a secure communications network, after imposing a national security exemption on contract tenders

National security exemptions are clauses in trade agreements that let governments stop foreign companies from bidding on national contracts. They are invoked when national security interests are at stake.

The Canadian government's IT operation, Shared Services Canada, said that it would be invoking national security exemptions for the procurement of "consolidated email, telecommunications and data centre infrastructure, systems and services".

The government formed Shared Services Canada last year to create a single, secure communications network as part of an effort to pull together several disparate public sector email communication systems. It began an official industry consultation for its Email Transformation Initiative at the end of May. It then issued the tender for the secure network via the government's MERX procurement system on Sept. 19, and revised on Oct. 3.

The announcement came just as the U.S. released a Congressional report alleging that Chinese companies Huawei and ZTE pose a security threat to the U.S. The companies are involved with China's government and military, said the report, advising that they be barred from mergers and acquisitions in the U.S.

Huawei, which has already acted as a supplier in network contracts for Canadian telecommunications companies, is fully incorporated in Canada.