Banning Huawei from Canada's 5G networks could be costly for taxpayers
As the Trudeau government decides whether to join its security and trading partners in banning Huawei Canada from supplying technology to build Canada's 5G wireless network, it risks an expensive lawsuit under the terms of a foreign investor protection agreement signed by its predecessor.
Stephen Harper's Conservative government concluded negotiations on the Canada–China Agreement for the Promotion and Reciprocal Protection of Investments in 2012. At the time, it was seen as a necessary precursor to the comprehensive free trade talks the two countries hoped eventually to explore.
Now, those trade talks are on ice due to tense diplomatic relations with Beijing. And the investor protection treaty now threatens to complicate any plans the Liberal government has to keep Huawei out of Canada's high-speed 5G network.
That might explain why Canada is taking so long to make a decision about Huawei — even as the U.S. and other members of the Five Eyes intelligence alliance, as well as major European players like Germany, have moved to shut the company out of their wireless infrastructure, despite warnings about increased costs and rollout delays.
Under Canada's investment agreement with China, Huawei Canada — as an existing investor that already owns assets and has business relationships here — "can bring a claim at any time against Canada, for any kind of regulatory action," said Gus Van Harten, a professor at Osgoode Hall Law School who specializes in the investor-state dispute settlement (ISDS) mechanisms in treaties like this one.
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