Back to news

October 4, 2018 | Local, Naval

Chinese-made equipment in Canada's Arctic ships under scrutiny

Murray Brewster · CBC News

Canadian queries about Chinese content could be response to American anxiety, says intelligence expert

Canada's international trade minister quietly sounded out officials at the Department of National Defence last spring about how much of the content in the navy's new Arctic Offshore Patrol Ships could be sourced back to China, newly released documents reveal.

The unusual April request from the office of François​-Philippe Champagne, who was international trade minister at the time, was made as Canadian negotiators were struggling to negotiate a revised North American Free Trade Agreement with the Trump administration — which has become increasingly suspicious of the involvement of Chinese companies in the defence and high-tech sectors.

An information note, detailing the answers given to Champagne, was prepared for Defence Minister Harjit Sajjan and obtained by CBC News under access to information law.

"Equipment has been sourced from a variety of manufacturers, many of whom are offshore, with a very limited amount being procured from the People's Republic of China," said the April 4, 2018 briefing prepared by DND's project management office.

Chinese steel

The briefing made a point of underlining the Canadian content requirements that are part of every major capital project.

It noted that 17 per cent of the steel being used to construct the warship — as well as the lifeboats, mooring and towing system components and various pipes and fittings — came from Chinese companies.

Champagne was shuffled last summer to the infrastructure portfolio. Officials who worked for him said Wednesday they were not sure what his request was about.

Defence and intelligence experts find the inquiry about the warship components curious — and not only because of Washington's growing trade fight with Beijing.

The Pentagon has been quietly sounding out allies about who is building their military equipment, both hardware and software.

"There's been some concern about this in ... U.S. military circles, about the degree to which there is Chinese ownership of firms working in sensitive areas," said Dave Perry, a procurement expert at the Canadian Global Affairs Institute.

"At a fairly high level, the U.S. (Department of Defence) was concerned about Canada having involvement of firms in defence supply chain that has Chinese angles, Chinese partial ownership."

The documents demonstrate how hard it can be to trace the provenance of military parts.

One of the firms supplying anchors for the Arctic ships was Apache International Ltd., which has listed itself as a Canadian company with an office in China. Following Champagne's questions, it was determined the original manufacturer of the equipment was Chinese.

Wesley Wark, a University of Ottawa professor and one of the country's leading experts on cybersecurity and intelligence, said the Americans' concern relates mostly to electronics and other "warfighting equipment" — not necessarily the nuts and bolts.

The U.S. Defence Department's acquisition chief said last summer the Pentagon was developing a so-called "Do Not Buy" list of software that does not meet national security standards.

'A certain xenophobia'

Canadian concerns about Chinese product in the Arctic ships could be influenced by American concerns, said Wark, who noted that Canada has struck an independent tone when it comes to trade relations with China and has resisted U.S. and Australian pressure to ban Chinese telecom giant Huawei.

"Canada has been under intense pressure by the Trump administration to follow the general lead on waging a trade war with China," he said. "There is White House pressure on the Pentagon. The Pentagon has legitimate concerns, like any Western military, about allowing certain elements of Chinese manufactured stuff into its infrastructure."

Complicating matters is an almost-forgotten case of alleged espionage that is still grinding its way through the legal system.

Chinese-born Qing Quentin Huang, who worked for Lloyd's Register, was charged in 2013 with "attempting to communicate with a foreign entity."

He was accused of trying to pass design information about Canada's Arctic ships to the Chinese.

Aside from its understandable military and economic policy concerns, Wark said the White House position on China is being driven in part by "a certain xenophobia" that is troubling.

"You have to be careful not to find ourselves falling into that American model," he said. "We can make our own distinctions about what might be sensitive or dangerous."

https://www.cbc.ca/news/politics/chinese-made-equipment-in-canada-s-arctic-ships-under-scrutiny-1.4849562

On the same subject

  • Canada, U.S. vow stronger protection against ‘greater and more complex’ missile threat

    August 17, 2021 | Local, Aerospace, C4ISR, Other Defence

    Canada, U.S. vow stronger protection against ‘greater and more complex’ missile threat

    Statement from Defence Minister and U.S. Secretary of Defence appears to represent a deepening of Canada-U.S. collaboration in protecting North America from missile threats

  • Ottawa’s legal bill nearly $12 million for warship work

    November 28, 2018 | Local, Naval

    Ottawa’s legal bill nearly $12 million for warship work

    Andrea Gunn (agunn@herald.ca) The federal government has spent $11.8 million on legal fees relating to the Canadian Surface Combatant project over the past two years, some of that owing to a large number of amendments to the project's request for proposals. In an answer to a written question posed last month by a Calgary Conservative MP, Public Services and Procurement Canada confirmed that 88 amendments had been made between July 1, 2016, and Oct. 2, 2018 to the request for proposals for the massive, multibillion-dollar project that aims to replace the Royal Canadian Navy's fleet of frigates. The request for proposals — the document that interested consortiums would have crafted their bids around — was released to 12 companies that had been pre-qualified to participate in the procurement by Irving Shipbuilding in October 2016. Irving is the prime contractor for the combat portion of the National Shipbuilding Strategy, which includes the Arctic Offshore Patrol Ships and the Canadian Surface Combatant, and is tasked with building the 15 warships at its Halifax shipyard. At a projected cost of between $56 and $60 billion, it's the largest and most complex procurement in Canadian history. There were a number of delays in the closing date for the request for proposals. Originally set for April 2017, the first bids weren't received until last November. In its many technical briefings and media releases from that period, PSPC said the delays were partially as a result of the back-and-forth between industry, government and Irving — feedback which resulted in a number of amendments to the RFP. “A total of 88 amendments were issued by Irving Shipbuilding between November 1, 2016 and August 13 2018,” the order paper question response reads. “These amendments were developed and issued to address inquiries from the 12 pre-qualified bidders, and to incorporate process improvements to the competitive RFP so as to maximize the opportunities for bidders to demonstrate the value of their solutions to Canada.” The response goes on to say the $11.8 million was spent by the government of Canada on project legal fees during the amendment period, but that PSPC is not able to provide a breakdown on how much was spent on the amendments themselves. PSPC also noted that because Irving issued the RFP, they would have also incurred legal fees. In the end, three firms submitted bids for the Canadian Surface Combatant and last month the federal government chose a consortium of Lockheed Martin Canada and BAE Systems offering the UK navy's Type 26 global combat ship as the preferred bidder. Full article: https://www.thechronicleherald.ca/news/local/feds-legal-bill-nearly-12m-for-warship-work-261231/

  • Extension October 03 | Business opportunity with General Atomics Aeronautical Systems inc.

    August 19, 2020 | Local, Aerospace

    Extension October 03 | Business opportunity with General Atomics Aeronautical Systems inc.

    Canada Economic Development for Québec Regions (CED-Q) is pleased to inform you of the General Atomics Aeronautical Systems, Inc. (GA-ASI) MQ-9B SkyGuardian Strategic Industry Engagements. As part of their commitment to Canada and Canadian industry, GA-ASI will interview companies in relation with the National defense Remotely piloted aircraft system project (RPAS). Canadian companies with proven aerospace and defense capabilities and able to provide technologies in the following areas are invited to register: Aircraft Operations & Maintenance (O&M) Sensor Data Processing, Exploitation and Dissemination (PED) Airborne Sensors/Payloads Global Supply Chain for aircraft components & manufacturing Unmanned Aircraft Research and Development (R&D) related projects You are invited to submit a request to participate and include your company profile and additional information requested in the Participation Request form at: https://www.ga-asi.com/canada-industry-engagement. These strategic industry engagements are only open to Canadian companies. Companies that have submitted a request to participate will be reviewed by GA-ASI. Those selected to discuss their company's capabilities and a potential project will be sent a formal invitation with details and a time to meet with GA-ASI's subject matter experts. Registration will be open from August 19 - October 03, 2020. Companies will be notified the first week of October on whether they are selected. Selected Canadian companies will have the opportunity to sit down and have business to business meetings with GA-ASI personnel to discuss their company's capabilities and opportunities to work with GA-ASI. Please review the GA-ASI overview presentation prior to submitting your request to participate. Thank you and we look forward to your involvement in the industry event. For additional information, please feel free to email: CED-Q : mathieu.trudelle2@canada.ca GA-ASI at: GA-ASI-in-Canada@ga-asi.com

All news