Canada’s top spy used his first public speech to warn of increasing state-sponsored espionage through technology such as next-generation 5G mobile networks.

Canadian Security Intelligence Service director David Vigneault’s comments come as three of the country’s Five Eyes intelligence-sharing allies have barred wireless carriers from installing equipment made by China’s Huawei Technologies Co. Ltd. in the 5G infrastructure they are building to provide an even-more-connected network for smartphone users.

The United States, Australia and New Zealand have taken steps to block the use of Huawei equipment in 5G networks. Neither Canada nor Britain has done so.

On Monday, the head of Britain’s Secret Intelligence Service, known as MI6, publicly raised security concerns about Huawei telecommunications being involved in his country’s communications infrastructure.

Both Canada and Britain are conducting security reviews of the Chinese company’s 5G technology.

Speaking Tuesday in Toronto at the Economic Club of Canada, CSIS’s Mr. Vigneault told a business audience that hostile states are targeting large companies and universities to obtain new technologies. He refrained from naming any particular country, company or university.

“Many of these advanced technologies are dual-use in nature in that they could advance a country’s economic, security and military interests,” he told an audience of about 100 people.

Mr. Vigneault said there are five potential growth areas in Canada that are being specifically threatened, including 5G mobile technology where Huawei has been making inroads.

“CSIS has seen a trend of state-sponsored espionage in fields that are crucial to Canada’s ability to build and sustain a prosperous, knowledge-based economy,” he said. “I’m talking about areas such as AI [artificial intelligence], quantum technology, 5G, biopharma and clean tech. In other words, the foundation of Canada’s future growth.”

Mr. Vigneault said large corporations typically hold the most valuable information but they try to put in state-of-the-art cyberdefences, while Canadian universities are largely unaware how they are vulnerable to economic espionage and the threat of infiltration by unnamed state actors who would use their expertise to gain an edge in military technologies. Huawei has developed research and development partnerships with many of Canada’s leading academic institutions.

The CSIS director’s warnings come as the United States has mounted an intense campaign to convince Canada and other members of the Five Eyes intelligence alliance to bar Huawei from being involved in 5G mobile technology and software.

Canada and Britain have so far resisted the U.S. lobbying campaign and risk facing restrictions on what sensitive intelligence from allies is shared with them.

Speaking Monday in Scotland, MI6′s Alex Younger said Britain has to make a decision about Huawei after the United States, Australia and New Zealand acted against the Shenzhen-based company.

“We need to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies and these platforms in an environment where some of our allies have taken very definite positions,” Mr. Younger told students at the University of St. Andrews.

Echoing the words of spy chiefs in the United States, Australia and New Zealand, Mr. Younger said 5G technology – which offers faster download speeds – poses a greater national security threat than conventional mobile technology.

“With 4G there are specific modes of technology and we developed a very good understanding with Huawei of where we were able to monitor and look at that aspect of their offer,” Mr. Younger said, referring to Britain’s Huawei testing facilities that are staffed by former intelligence officers. “That is impossible with 5G.”

The MI6 chief said the advent of 5G technology would make it more challenging to monitor Huawei technology, a task made especially difficult by China’s one-party state. “In China, they have a different legal and ethical framework,” Mr. Younger said. “They are able to use and manipulate data sets on a scale that we can only dream of.”

Chinese law requires companies in China to “support, co-operate with and collaborate in national intelligence work” as requested by Beijing. Huawei Canada vice-president Scott Bradley has told The Globe and Mail that the company is not a national security threat and its “highest priority is – and always has been – the security and privacy of networks that we help to equip here in Canada.”

Public Safety Minister Ralph Goodale told The Globe on Tuesday that officials are weighing “very carefully” the security challenges of safeguarding Canada’s telecommunications network from any potential threat from Huawei’s 5G technology.

“Obviously we talk to our allies in the Five Eyes,” he said. “We take all of the international information, data and concerns in very careful account.”

Mr. Goodale said the federal review is examining the potential economic benefits of Huawei technology and the potential spying threat it poses. He was unable to give a timeline of when the review would be complete.

A ban would come as a blow to Canada’s biggest telecom companies, including BCE Inc. and Telus, which have given Huawei an important role in their planned 5G networks. BCE and Telus have declined to comment on a Wall Street Journal report that the United States has asked telecom executives in allied countries to forgo Huawei 5G equipment.

Canada has testing facilities similar to Britain where independent labs – funded by Huawei but staffed by independent experts – test the Chinese company’s equipment and software for security flaws.

In late September, Scott Jones, the new head of the Canadian Centre for Cyber Security, which is part of the Communications Security Establishment, rejected the idea of blocking Huawei, telling MPs that the country’s safeguards are adequate to mitigate against any risk.

Mr. Jones’s comments prompted two members of the U.S. Senate intelligence committee – Democrat Mark Warner and Republican Marco Rubio – to write to Prime Minister Justin Trudeau, warning that failure to ban Huawei could interfere with intelligence sharing and impair cross-border co-operation in telecommunications.

Mr. Jones subsequently said his remarks were intended to focus on security of existing mobile technology such as 4G and LTE.

The Globe and Mail, December 4, 2018