The RCMP has suspended a procurement contract with a company that has links to China.
Public Safety Minister Marco Mendicino confirmed Thursday that the RCMP has suspended a contract with Sinclair Technologies for radio frequency (RF) equipment. Sinclair's parent company, Norsat International, has been owned by Chinese telecommunications firm Hytera since 2017.
The Chinese government owns around 10 per cent of Hytera through an investment fund.
"As of this moment, the RCMP have suspended the contract with Sinclair, and they are in the process of both reviewing the manner in which this contract was awarded, as well as mitigating against any risks," Mendicino said in a media scrum Thursday.
An RCMP spokesperson previously told Radio-Canada that installation work for the RF system had started in Ontario and Saskatchewan. Mendicino didn't directly answer a question about whether the equipment, which is designed in part to secure the RCMP's radio communications, will be removed.
"That is precisely what I've asked the RCMP to examine very carefully. They have indicated to me that it is the RCMP that have installed this equipment, so there was a degree of control exercised over it once the equipment has acquired," Mendicino said.
"But they are going back and double checking, being absolutely sure that they are mitigating against any potential residual risks."
The United States Federal Communications Commission (FCC) blacklisted Hytera in 2021. The FCC says the company is one of several Chinese firms that pose "an unacceptable risk to the national security of the United States or the security and safety of United States persons."
Prime Minister Justin Trudeau said Wednesday that the government would examine the contract.
Trudeau said the government "will have some real questions for the independent public service" about the contracts. He said the government will look at changing its procurement rules so that contracts don't always have to go to the lowest bidder.
Public Services and Procurement Canada (PSPC) previously told Radio-Canada that security concerns and Sinclair's ownership were not taken into consideration during the bidding process. The contract, awarded on October 6, 2021, was worth $549,637.
Sources with knowledge of the matter confirmed to Radio-Canada that the difference between Sinclair's bid and that of its competitor, Quebec-based Comprod, was less than $60,000.
CBC News has reached out to the RCMP and Sinclair for comment.
The news comes at a time of rising tensions between China and Canada. The government recently unveiled an Indo-Pacific Strategy which includes a plan to address China's increasing power on the world stage. China's government has condemned the strategy, saying it's "full of unscrupulous attacks and smears against China."
Foreign Affairs Minister Mélanie Joly said the RCMP-Sinclair contract was not consistent with the Indo-Pacific Strategy.
"I said in the Indo-Pacific Strategy that we need to put the national lens on our contracts and our decision-making. This is the position of the government going forward," she said in a media scrum ahead of question period Thursday.
Joly, like Trudeau, said the public service was at fault.
"The independent public service ... decided to sign that contract at the time," Joly said, adding that the contract "should have never been signed."
Radio-Canada reported Thursday that the federal government did not seek a risk assessment from the Communications Security Establishment (CSE), Canada's electronic spy agency, on the contract.
CSE's mandate allows the agency to carry out cybersecurity and supply chain integrity risk assessments or business ownership reviews on request.
WATCH | Conservative critic reacts after RCMP suspends contract with China-linked company
Conservative critic reacts after RCMP suspends contract with China-linked company
Michael Barrett, the Conservative critic for ethics and accountable government, called on the government to make changes to prevent a similar situation from happening again.
"[There are] a lot of concerns, but it really comes down to … the government put the fox in charge of the hen house, and we need to find out how this happened and make sure it doesn't happen again," Barrett said in a media scrum Thursday.
"We, Canadians, need to have confidence that the government is making the right decision the first time."
Defence investigating Sinclair contracts
In response to questions from CBC, a spokesperson for the Department of National Defence (DND) said in an email the department is investigating Sinclair Technologies "procurements" and how the equipment procured is being used.
The spokesperson added that, while the work is ongoing, the department has identified one DND procurement contract awarded to Sinclair since the company's acquisition by Hytera in 2017.
Details of the contract posted online say it was for 12 antennas for two naval bases — CFB Halifax and CFB Esquimalt in B.C.
"We are aware of the concerns surrounding Sinclair Technologies," the spokesperson said.
"We are investigating these procurements and the way in which this equipment is used, alongside counterparts in other government departments ... We will continue to take all measures necessary to ensure the security of our infrastructure."