Huawei funds $56M in academic research in Canada. That has some experts concerned

Chinese telecom giant Huawei is a major provider of academic research funding in Canada. That has some experts alarmed given the company's reported ties to the Chinese government.

Company denies allegations of spying, ties to Chinese government

Chinese telecom giant Huawei is a major provider of academic research funding in Canada. That has some experts alarmed given the company's reported ties to the Chinese government. (Stefan Wermuth/AFP/Getty Images)

This story is part of a CBC News series exploring China's expanding influence around the world and how Canada and other countries are contending with China's power.

Chinese telecom giant Huawei funds millions of dollars in technology research in Canada, and that has some tech and national security experts alarmed.

Huawei has been singled out by intelligence and security agencies around the world. It's been called a "Trojan horse" and a threat to Western nations. It's believed by many to be linked to the Chinese government and is regularly accused of spying and intellectual property theft — all allegations it denies.

CBC News has found Huawei's financial ties to Canadian universities total more than $56 million. But there are no federal guidelines around how these investments should be managed and disclosed, and that raises questions about who will own the findings of the research and the resulting patents.

The Globe and Mail first outlined the depths of those financial ties last spring. Since then, universities continue to operate without any clear guidance from the federal government.

"Frankly, the government of Canada has fallen down catastrophically," says Christopher Parsons, a senior research associate at the University of Toronto's Citizen Lab, which studies the way information is used, and misused, across technologies. "No one knows exactly what they should be doing."

Christopher Parsons, research associate at the Munk School of Global Affairs, University of Toronto. Parsons says the federal government must give universities clear direction about funding from companies like Huawei. (Ousama Farag/CBC)

Parsons, who is also the managing director of the Telecom Transparency Project, says the government's failure to set out policy guidelines for private sector funding has made it difficult for universities, which rely on that funding to stay at the forefront of wireless research and, in turn, attract top students.

Data collection expert gives compelling reasons for Huawei to stay in Canada

4 years ago
Duration 1:34
Featured VideoChristopher Parsons says Canada needs to take the long view in managing risks around Chinese tech giant Huawei

Huawei says it is one of the biggest funders of academic research in Canada. Google, Microsoft, Rogers and Bell are among the others but declined to provide CBC News with any figures. Like Huawei, they are not required to disclose funding details.

Without guidelines, Parsons says the universities are being asked to play the roles of the intelligence and security communities, export development agencies and policy-makers.

"Things are really grey at the moment for universities," says Parsons. "They've been instructed by CSIS [Canadian Security Intelligence Service] that there is something to be aware [of] but they don't know exactly what."

Fears about Huawei 'overblown'

Huawei's vice-president of corporate affairs, Alykhan Velshi, says fears and concerns about Huawei are "overblown and not really based on fact."

He said the company is committed to keeping the research public, and that agreements signed in the last year provide for the company and the university to share any patents.

"The researchers who collaborate with us have the ability to commercialize the research themselves," Velshi said.

Alykhan Velshi, vice-president of corporate affairs at Huawei, says most of the concerns about the company are 'overblown and not really based on fact.' (Ousama Farag/CBC)

The academic research is part of an overall $164 million Huawei spent in research in Canada last year. 

Huawei has been operating in Canada for 10 years, selling the equipment that wireless carriers like Bell and Telus use to build their networks. (Rogers used to be supplied by Huawei but has switched to Huawei's biggest competitor, Ericsson.)

Velshi said the company works closely with other major telcos and is in weekly contact with Canada's security agencies. The government hasn't reported any security incidents or complaints about Huawei's operations in this country.

"If those counter-parties didn't feel that we were a trustworthy actor or we were a company with whom they could do business, they wouldn't do business with us," Velshi said.

Velshi said Huawei's partners in Canada "see that is in their interest to work with us."

Huawei 'not a normal company'

A national security expert say we simply can't talk about Huawei the way we talk about other companies. Stephanie Carvin, an assistant professor from Carleton University in Ottawa calls Huawei a "state-championed company." She says the company is intertwined with and supported by the Chinese government in ways that most companies are not.

"The Chinese state has taken two Canadians hostage on behalf of Huawei," she said, referring to Michael Spavor and Michael Kovrig, whose detention in China is widely speculated to be in retaliation for Canada's arrest of Huawei chief financial officer Meng Wanzhou. "That's not a normal company, and I don't think we should be considering it as such."

Carvin says the universities are being put in an impossible situation.

"There's no good options here," she says. "It's either you're denying these universities money or we're making cheap IP [intellectual property] for the Chinese state. Pick your poison."

Parsons says without seeing the contract language, it's impossible to know how any patents would be shared between academic institutions and Huawei. His concern is that Huawei would retain control over any technological discoveries, shutting out other companies and potentially hurting Canada's national interest, especially when it comes to 5G technology, the next generation of wireless that will be used in critical infrastructure such as power grids. 

A Huawei ad for 5G in Shanghai. Intelligence and security agencies around the world have raised alarms Huawei's role in building the next generation of wireless infrastructure. (Chinatopix/The Associated Press)

"What are the terms under which the patents are assigned?" asks Parsons. "Are they being done in a way that is coherent with the Canadian government's foreign policy for national security objectives?"

Over the past five years Huawei has had a financial relationship with 17 Canadian universities, ranging from tens of thousands of dollars to many millions of dollars.

Huawei funded a project at the University of Western Ontario, in London, which the university says is "related to the research and development of telecommunications products and services" at the university.

The University of Waterloo has scholarships and engineering awards funded by Huawei. The university says Huawei has provided $15.3 million in research funding over the past five years for a total of 16 projects, which include research into wireless systems, autonomous driving  and network virtualization.

The University of British Columbia provided details on a three-year, $3-million partnership researching "advanced communications and 5G projects."  In a statement, JP Heale, the managing director of UBC's Industry Liason Office, said: "All of our research contracts include a publication clause guaranteeing UBC the right to publish results."

Quebec City's Laval University was less forthcoming, saying only, "The investment of Huawei is confidential as per the collaborative contracts." The University of Guelph told CBC News that Huawei has invested in two research projects, but declined to provide details on the nature of that research.

Government has 'failed'

The schools are under no obligation to disclose this information. 

"It's not on them as the government has ... failed to explain what needs to be done," said Parsons. He says the government has to give the universities guidance about "the processes that need to be put place to receive money from Huawei — or any other Chinese company, for that matter." 

Carvin agrees. She says instead of security agencies speaking with universities in vague terms about potential threats, the federal government has to take charge.

"And I think the first way to do that is developing an economic national security plan" laying out Canadian policy in dealing with foreign companies investing in critical research.

It will take time for the newly minted federal cabinet to get briefed and up to speed on the big issues of the day. But experts like Carvin and Parsons feel the question of Huawei needs to be near the top of the list if priorities.

For now, Ottawa will say only that "an examination of emerging 5G technology and the associated security and economic considerations is underway."

Read the stories in this series:


Senior Business reporter for CBC News. A former host of On the Money and World Report on CBC Radio, Peter Armstrong has been a foreign correspondent and parliamentary reporter for CBC. Subscribe to Peter's newsletter here: Twitter: @armstrongcbc