Bains mum on if telecom concerns led to Aecon takeover denial

OTTAWA — Innovation Minister Navdeep Bains wouldn’t say Thursday whether concerns about the security of telecom networks played a part in the reason the federal government decided to block the acquisition of Aecon Group Inc. by a Chinese company. The government announced Thursday morning that it wouldn’t allow China Communications Construction Company International Holding Limited (CCCI) to buy the Canadian construction and infrastructure company, citing national security concerns. Speaking to reporters following a panel appearance at an event in Ottawa, Bains said the decision “was subject to a multi-step national security review process that exists for all companies. It’s part of the Investment Canada Act process.” He said that involves getting advice from national security agencies. “And they clearly gave advice that this decision should be blocked, and I followed that advice,” he said. Bains declined to say whether concerns about any particular sector, such as telecom, led to the decision. “I can’t comment on the specifics of what the national security agencies do tell me,” he said. The government launched a national security review of the proposed deal in February. The Globe and Mail reported in March, citing an analyst, that the deal could fall through because it could put China in charge of Aecon’s telecom arm. That division builds and maintains legacy copper, coax and fibre networks, according to its website, which notes it has “long-term master service agreements with some of the country’s top telecommunications suppliers.” University of Toronto law professor Anita Anand wrote in an opinion piece in April that Aecon is involved in “various highly sensitive projects,” including in nuclear power plants, military facilities, and the telecom sector. She noted that CCCI’s “close links with the Chinese government have led commentators in Canada and the United States to highlight the risk that it poses in passing sensitive information and technology to Beijing,” said that if the deal were to go ahead, the “benefits to Aecon and its shareholders pale in comparison to the risks confronting our national security interests if this deal occurs.” Defending the deal in a Globe article earlier this month, executives from both companies said Aecon "installs and pulls cable; it doesn't build or operate telecom systems." Aecon had been lobbying the government on the matter over the past couple of months. Telecom security was also at issue the first time the government cited national security concerns to block a foreign takeover, in 2013. That’s when it denied a $520-million deal to acquire Allstream from Manitoba Telecom Services Inc., now owned by BCE Inc. The decision led Egyptian billionaire and one time financier of Wind Mobile (which would later become Shaw Communications Inc.’s Freedom Mobile) Naguib Sawiris to say he was finished investing in the Canadian market. Concerns over telecom infrastructure have also been raised by some in the context of Huawei Technologies Co. Ltd., both in the United States and in Canada, where Conservative MP Candice Bergen brought up the issue in the House of Commons in March. Huawei has been working with Canadian telecoms on 5G tests and investing in research initiatives. Bains said Thursday in response to a question about those concerns that “at this stage… there is no such issue that’s been brought to my attention, but we continue to monitor the situation when it comes to our national security interests.” The company has also maintained there is no reason for such worries. “Huawei has been working openly and transparently with Canadian operators and the Canadian government since coming to Canada in 2008. There has never been an issue,” Scott Bradley, vice-president of corporate affairs at Huawei in Canada, told The Wire Report in a March statement. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Bains mum on if telecom concerns led to Aecon takeover denial

News | May 24, 2018

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Bains mum on if telecom concerns led to Aecon takeover denial

News | May 24, 2018

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