Trudeau says no security risks in Chinese takeover of Canadian satellite firm

CTV National News: A controversial sale Prime Minister Trudeau downplayed growing security concerns over the sale of Norsat to a Chinese company. Omar Sachedina reports.

OTTAWA -- Prime Minister Justin Trudeau sought Tuesday to assuage public fears and political complaints that the Liberal government's decision to allow the Chinese takeover of a Canadian satellite technology company would compromise national security at home and abroad.

Hytera Communications Co. Ltd. is set to take over Norsat International Inc., which manufactures radio transceivers and radio systems used by the American military and Canada's NATO partners.

The private Chinese firm first made a bid for the Vancouver-based technology company in 2016, triggering a review under federal law to ensure Canadian interests weren't harmed in the foreign takeover.

It was only earlier this month that the results of the review were made public when the company said it had been informed that a formal security review wouldn't be required.

Trudeau said an initial government review of the takeover, required under the Investment Canada Act, unearthed "no significant national security concerns" and didn't require any further reviews.

The national security agencies involved in the review recommended the deal be allowed to proceed, he said.

"The review they did was adequate to give them confidence that there was no risk to national security. Therefore, their recommendation to the minister was to allow it to proceed. So we did."

Trudeau insisted that his government would never approve any foreign takeover if there is even a hint of concern that it would harm national security.

"We would not move forward with approving investments under the Investment Canada Act if we were not assured and comfortable that there is no risk to national security, period," he told a news conference.

"It doesn't matter what country it's from, it doesn't matter what deal it is, if there's a risk to national security, we won't move forward."

The deal has been the focus of a debate over national security risks and the federal government's willingness to approve a Chinese takeover of a Canadian technology company.

It also comes as the Liberals and China pursue exploratory free trade talks; the Canadian government is aiming at opening up the Chinese market to domestic producers in the face of Donald Trump's "America First" policy on trade.

The ongoing dialogue included an agreement last week where the two countries agreed not to engage in state-sponsored hacking of each other's trade secrets and business information.

Opposition MPs have repeatedly raised concerns about the Norsat takeover and there is unease among congressional representatives in the United States about allowing the Chinese firm access to sensitive defence technology.

A spokesman for the U.S. Department of Defence said it is reviewing all its business dealings with Norsat as a result of the deal.

"Current contracts already awarded will be reviewed on a case-by-case basis and appropriate measures will be taken, in accordance with the terms of those contracts and consistent with U.S. laws and department regulations and policies," Lt.-Col. Roger Cabiness said.

Cabiness didn't say if the department was consulted as part of the Canadian security review. He said that any "transfers of sensitive technologies and capabilities should be carefully vetted to mitigate potential risks to U.S. and allied security interests."

Norsat (TSX:NII) makes satellite communications systems used for national security and defence purposes. It has a number of government customers in Canada and internationally, including the Canadian Coast Guard and the Pentagon.

Trudeau said Canadian security agencies consulted American officials as part of their preliminary security screen. Last week, Norsat security holders voted overwhelmingly in favour of the takeover bid.

The company said the B.C. Supreme Court approved the deal on Tuesday, but it still remains conditional on other regulatory approvals and certain other closing conditions.