Federal government awarded RCMP contract to firm with ties to China

The federal government awarded a contract to provide and maintain RCMP communications equipment to a company with ties to the Chinese government, Radio-Canada has learned.

The contract has security experts raising concerns about potential Chinese access to RCMP communications and data.

On October 6, 2021, the federal government awarded Sinclair Technologies a contract worth $549,637 for a radio frequency (RF) filtering system. One of the system's purposes is to protect the RCMP's land-based radio communications from eavesdropping.

While Sinclair Technologies is based in Ontario, the company has been controlled by Hytera Communications of Shenzen, China since 2017, when Hytera purchased Norsat International, Sinclair's parent company.

The Chinese government owns approximately 10 per cent of Hytera Communications through an investment fund.

The United States Federal Communications Commission (FCC) blacklisted Hytera in 2021. The FCC says the company is one of several Chinese firms thatpose"an unacceptable risk to the national security of the United States or the security and safety of United States persons."

Sales and imports of Hytera equipment are banned in the United States as a result.

Chinese telecommunications firm Huawei also appears on the list. Canada banned Huawei from its 5G network this year.

Hytera Communications is facing 21 charges in an American espionage case. The United States Department of Justice has accused the company of conspiring to steal trade secrets from American telecommunications company Motorola.

The indictment allegesHytera recruited and hired Motorola employees to obtain confidential business information between 2007 and 2020. Hytera Communications has denied all the charges in the indictment.

Sinclair Technologies' main competitor for the RCMP contract was Comprod, a Quebec-based communications technology firm.

Jawad Abdulnour, Comprod's vice-president of R&D and engineering, said Sinclair Technologies can make equipment cheaper thanit did before because some of its components are now made in China, not Canada.

"It's very frustrating, disappointing and worrisome," Abdulnour said in an interview.

"How is it that a government agency just goes with the lowest bidder and will give contracts to companies like that when we're talking about national security?"

Radio-Canada has confirmed through several sources with knowledge of the process who were not authorized to speak publicly on the matter that the difference between the Sinclair and Comprod bids was less than $60,000.

An RCMP spokesperson told Radio-Canada in a media statement that installation work on the systems has started in Ontario and Saskatchewan.

"Most of the time, the RCMP radio support teams carry out the installation themselves," said Cpl. Kim Chamberland in an email.

But the contract's call for tenders requires that the contractor provide maintenance and technical support services after the system is installed.

Chamberland told Radio-Canada that the RCMP is confident the system will remain secure.

"All information, including radio frequencies, is shared securely and only with those with the appropriate level of security," she wrote.

"All contractors who have access to RCMP networks and locations must obtain a security clearance according to the work to be performed."

A spokesperson for Public Services and Procurement Canada (PSPC), the department that awarded the contract, said in response to Radio-Canada's questions that PSPC did not take security concerns and Sinclair's ownership into consideration during the bidding process.

Sinclair Technologies declined to answer Radio-Canada's questions about whether its equipment contains components made in China, and whether Hytera can accessRCMP radio frequencies.

"Due to customer confidentiality, we are unable to provide comment and we respectfully decline your interview invitation," Wee Er, executive general manager of Sinclair Technologies, said in an email.

Experts concerned about security

Conor Healy is a Canadian now based in Washington who serves as director of government research at IPVM, a security and surveillance research group. He said he's concerned about giving a Hytera-owned company access to sensitive RCMP communications.

"If I worked for an intelligence agency, this is exactly the kind of system I'd want to have access to," Healy said.

Healy said the risks include eavesdropping, collection of communications dataand jamming or shutting down the radio communications system.

University of Ottawa senior fellow Margaret McCuaig-Johnston, a former senior federal official and a specialist on China's science and technology, said the government should terminate the contract.

"You have to be nave," McCuaig-Johnston said. "It's like giving the key to Canada's security to Chinese actors.

"It's not just about getting rid of the contract. It's also a matter of ripping out what has already been installed."

The October 2021 decision by the federal government makes Sinclair a preferred vendor for a three-year term. The agreement includes the possibility of a two-year extension option.