The News Rundown

Chinese government-owned firm wins $6.8M contract to supply security equipment to Canada's embassies

The latest addition to the growing saga of Canada-China relations has had a new chapter added by the federal government. The government of Canada has awarded an estimated $6.8 million contract to a state-owned Chinese company to supply security equipment for 170 embassies, consulates and high commissions around the globe.
The contract for conveyor-style X-ray machines was awarded to Beijing-based Nuctech Company, a company owned by the Chinese government and founded by the son of former General Secretary of the Chinese Communist Party, Hu Jintao.
Nuctech is known as the “Huawei of airport security,” supplying X-ray machines, scanners and explosive detection systems to airports and customs offices in 160 countries. The company has recently developed a new type of airport body scanner, which features a thermal imaging camera that can detect elevated body temperatures.
Global Affairs Canada has been upgrading embassy security and, through the department of Public Services and Procurement Canada, issued contracts for walk-through metal detectors, X-ray machines, and bullet resistant windows and doors.
Security companies were invited last December to submit bids, separately or jointly, for the metal detectors and X-ray machines. The tender document said the contract would be awarded to the lowest-bidder. California-based Rapiscan Systems won the contract for the metal detectors but was undercut by Nuctech for the X-ray contract.
A security industry source said that the X-ray machines are stand-alone systems that would not be connected to embassy networks. But he said he is concerned that there will now be “significant pieces of Chinese technology sitting in every embassy”. The contract includes delivery, installation, operator training and software.
Nuctech has been accused in the past of engaging in controversial business practices in Asia, Africa and Europe, including offering soft loans and illegal dumping, and allegations of corruption in Africa. This is done with the help of the Chinese government, who subsidize companies to allow them to drop their prices, making western companies noncompetitive.
The New York Times has repeatedly reported on an alleged corruption case in Namibia involving Nuctech. According to Namibian prosecutors, in May 2008, three suspects received $12.8 million in kickbacks to help Nuctech secure a $55-million X-ray scanner contract.
In 2010, the EU found Nuctech guilty of dumping – a practice whereby a product is sold at throwaway prices to thwart competition and establish a monopoly in the market. The company then set up a factory in Europe to address concerns, but cheap labour in Poland meant that costs continued to be low.
Nuctech has installed cargo screening equipment on some of Europe’s most sensitive borders, including at the gates to Kaliningrad, Russia’s Baltic Sea territory and nuclear-missile storage site sandwiched between Lithuania and Poland. At the EU’s borders with Belarus and Ukraine, cargo passes through Nuctech scanners on both sides. Last week, employees in its suburban Warsaw factory were assembling an X-ray truck for Ireland.
Critics of state-owned enterprises allege the Chinese government subsidizes its companies to allow them to bid at lower prices than Western competitors. Guy Saint-Jacques, a former Canadian ambassador in Beijing, said reciprocity is important when dealing with China. He said he hopes Ottawa re-examines a bidding process that awards contracts on price alone because it “creates vulnerabilities.”
The former ambassador said he recalls a conversation with an ex-CEO of Bombardier, who said he could compete with Chinese companies in China but not in Boston or Chicago, where they would submit subsidized bids up to 40 per cent lower than Western companies. The Chinese strategy overseas is to win market share and, once dominant, dictate prices, Saint-Jacques said. “There are long-term implications for Western economies,” he said.
According to a report by the Wall Street Journal, the National Security Council and other government agencies in the US are attempting to persuade EU nations like Germany, Italy, and Greece to ditch baggage screening systems from Nuctech, a Chinese state-run company, whose units are now ubiquitous in most airports across Europe.
Officials in Washington reckon that any connected device, such as the ones manufactured by Nuctech, could pass on sensitive passenger data like travel history and shipping manifests to Chinese spies via a backdoor in the screener technology. The United States Transportation Security Administration banned Nuctech hardware from most airports in the country in 2014 following a review of the underlying technology used in the machines. The report is classified.
Minister of Foreign Affairs Francois-Phillipe Champagne promised to review “any possible issue relative to security or safety … all appropriate actions (will be) taken to ensure the safety of our missions around the world.”
Champagne says: “We are currently looking into the offer with Nuctech Company to provide some security screening equipment in our missions abroad. Global Affairs has not purchased any equipment from Nuctech at this time. In addition, I have today directed officials to review our purchasing practices when it comes to security equipment and to continue reviewing the security of our missions around the world.”
Other than Champagne's statement, all of the related governmental bodies have declined comment. A Canadian security expert, who asked not to be identified due to risks related to China, said Nuctech presents a serious high-tech danger: “All electronic equipment is an end-point and potential access point into your network and data. For Global Affairs to proceed when China has been implicated in a systematic campaign of cyber-espionage against Canada, while former diplomats are being held hostage and tortured in Chinese prisons, is unintelligible.”
And that's it at the end of the day. The government's dealings with China have been wholly unintelligible. We need to stop letting China control our infrastructure and critical resources.
Supplementals:

Alberta in the past has had a history of cronyism within the top levels of government. Similar to what we’re seeing with Trudeau’s government nationally.
We went through a very bad period where the PC government lost Albertans.
The UCP last year was elected to bring in wholesale change to the province and that includes within Alberta’s bureaucracy.
Last year just weeks before Rachel Notley pulled the plug on her government the NDP appointed Ed Whittingham to the Alberta Energy Regulator as a director.
Whittingham is the former director of the Pembina Institute.
An institute that is anything but friendly to oil and gas development.
The Pembina Institute accepted north of $8m from US groups which targeted Alberta’s energy sector.
And one year ago this week, the UCP ordered a review of the Alberta Energy Regulator citing controversies such as paying for flights of executives who live outside Alberta (that’s right, executives for an Alberta agency who don’t live here), the AER’s ignoring of abandoned wells, and the resignation of the former CEO who used a sky high figure of $260b designed for a business meeting rather than actually calculating the amount.
The UCP’s election platform called for a review and promised to appoint a new board of directors.
As we progress further down the line away from Alberta’s 2019 election it seems people are surprised that the UCP is actually keeping campaign promises.
The article in the CBC automatically assumes that this is an unethical appointment but it’s not until the 20th paragraph in the story that the CBC details John Weissenberger’s qualifications.
Weissenberger has an impressive talent stack focusing on areas such as geology, engineering, public safety, economics, and environmental science. He also has a PhD in geology and is a former senior energy company executive. He has also taught as an adjunct professor at the University of Alberta’s department of earth and atmospheric sciences.
We always hear that the hiring process and policy process should be evidence based and a common thing for the NDP to do was to appoint university scholars to help build policy and run agencies.
But as the campaign manager talk ended the CBC moved to criticizing Weissenberger based on an article written in 2006. 14 years ago.
Weissenberger and his co-author said that the media was driving the climate change debate and they say he and his co-author listed weather events as evidence climate change wasn’t happening.
But if you read the actual article they are saying that people who equate weather and climate change are wrong and that people who link weather to climate change are making a “parody of climatology”
And nowhere in the article does he deny climate change is happening!
In fact, the author of this CBC story probably takes issue with the article because Weissenberger ended the article by calling the media credulous and also correctly pointed out that “The politicization of the climate change debate… drives the media bus.”
Oh and just to get all the usual points in, the CBC points out that Weissenberger has had a “long, connected history to former [P]rime [M]inister Stephen Harper.”
Alberta NDP environment critic Marlin Schmidt called the decision “irresponsible” and that “the world is telling us that we need to do a better job of managing the risks of climate change.”
For what it’s worth, the Alberta Energy Regulator says Weissenberger was hired on July 6th after a competitive hiring process.
With little information to support the cronyism allegation, touting the usual tropes of Harper bad, climate denials, leaving out key information until the 20th paragraph, and running to the NDP for comment this story amounts to nothing more than fake news from the CBC.
Supplementals:

Hotel rooms for B.C. homeless too hasty, NDP government told

When BC's legislature reopened for business at the end of June, one of the hot button topics for debate was the NDP's decision to purchase hotels around Victoria for the homeless population. The idea was to supplement modular and supportive housing projects in order to empty homeless camps in parks during the pandemic.
Social Development and Poverty Reduction Minister Shane Simpson says that the increase of the homeless population could be because some members are part of a long-running protest camp movement demanding government action. Public health orders were put in place to clear growing camps at Topaz Park and Pandora Avenue in Victoria, and Oppenheimer Park in Vancouver, but despite the government's millions in spending, homeless camps still persist in BC's two biggest cities.
In June, the BC government completed deals on two downtown Vancouver hotels, the 110-room Howard Johnson Hotel bought for $55 million, and the Buchan Hotel bought for $19.4 million. These follow the Victoria purchases made a month earlier. On May 15 the B.C. government purchased the 65 room Comfort Inn and Suites for $18.5 million, followed on June 2 by the 75-room Paul’s Motor Inn on Douglas Street for $15 million.
B.C. Liberal critic Joan Isaacs questioned Simpson about the latest government purchases of hotels, asking in question period: “Does the minister believe that the $500,000 per room — that’s what it turned out to be for Howard Johnson — is an efficient use of taxpayer dollars?”
Isaacs described a 400 per cent increase in crime reports in the downtown Vancouver neighbourhood of Yaletown after people camping in Oppenheimer Park were moved into hotel spaces.
A few months later, and we've seen that the goals of the program have fallen vastly short of the NDP's lofty goals. Provincial officials estimate that the number of people living on streets and in tent camps is continuing to rise, and despite government officials statements, crime around the purchased hotels has increased.
Last weekend several police officers were seen swarming the Travelodge hotel on Gorge Road in Victoria, another purchase by the BC government for the homeless.
Jennifer Almeida, a strata council member at the nearby Treelane Estates described the situation: “There were three squad cars and one wagon, and apparently there was a man with a knife confronting someone in Travelodge.”
A week earlier, police were called to the same hotel after a man threatened another with an air-gun, discharging it.
Almeida says she's concerned about the mental health of Treelane's residents, most of whom are seniors, some of whom she described as war veterans with PTSD, aggravated by the increased shootings and police presence in the area.
Resident Jessica Vazquez called the incidents "overwhelming" for local residents: “All we discuss is what happened the night before and what’s happening now. It’s overwhelming and it’s frustrating and it’s, like, what can we do about it? There’s only so much that can be done... I mean, how many times can you call the cops?"
Businesses are also being affected. Some Victoria businesses located near hotels housing the homeless are spending money buying security cameras and hiring security guards. They say that vandalism, drug use and trespassing has been rising, prompting customers to shop elsewhere. A hair salon owner found out about the purchase of the Comfort Inn in Victoria, where her business is located, from the media.
B.C. Liberal MLA Jas Johal told the B.C. legislature July 13 that salon operator Lindsay Price's first contact from B.C. Housing about the switch from hotel to shelter was via a construction worker who showed up to board up the windows of her shop, All About Hue Hair Designs. Price said her reopening plans were stymied by water damage resulting from a fire in early June above her space, shortly after campers were moved into the building.
Clients cancelled when they heard about the hotel sale, she said, and the remainder were forced to cancel after the water damage forced Price to close. Price is working from home at the moment and is planning to move into Admirals Walk shopping centre in August.
Clif Leir, is another business owner majorly impacted by the hotel purchases. Leir, who owns Paul’s Diner by Fol Epi, at Paul’s Motor Inn on Douglas Street, said he does not know if his business will survive.
Crime and disorder have made the property unviable for tenant businesses. With the business no longer viable, Leir has been told he will not be reimbursed for his costs. Leir recently completed $150,000 in renovations last year, but now fears it will all be in vain if he is forced to close: “So far, the only solution that’s been offered for us is writing off $150,000 in renovations, killing 20 good local jobs and giving up on our dream that we all worked so hard to achieve. If the government doesn’t fix this, it will ruin us.”
B.C. Municipal Affairs and Housing Minister Selina Robinson says that the tenants are welcome to stay or leave. “If these tenants feel that they cannot sustain their business or work with B.C. Housing, we’re absolutely prepared to work with them to create a transition for them.” She said in a later statement that “B.C. Housing does not hold anyone to a lease they don’t want to be in.”
Some tenants have chosen to remain, such as the restaurant in the recently purchased Buchan hotel in Vancouver. At Paul’s, one business has already terminated its lease and left, another has chosen to stay and a third has indicated they will be leaving and are free to do so at any time, she said. She made no reference to compensation.
Johal said he and other opposition MLAs called for compensation to people caught up in the rush to dismantle tent camps in the COVID-19 pandemic, but BC Housing has not been forthcoming. Todd Stone, BC Liberal Municipal Affairs and Housing Critic says “It’s important that we provide supportive or transitional housing with full wraparound supports for society’s most vulnerable but what we’ve seen happen with the purchases of hotels by B.C. Housing here in Victoria is nothing more than a failure at every level. In the middle of a pandemic, when people are already struggling, John Horgan has put small businesses at risk of bankruptcy while killing local jobs.”
In the end, we saw a complex issue being tackled in a radical, expensive way, and it's now having lasting repercussions on businesses and residents in the areas affected, all while not fixing the problems of the homeless camps in the first place. What we see is an absolute failure of the government to predict the consequences of their actions.
Supplementals:

Firing Line

I made a mistake' Trudeau sorry for taking part in cabinet's WE decision over $900M grant program

Last week it was brought to light that the Trudeau government is in serious trouble when it comes to the WE charity.
For those who may have missed last week's podcast, the government greenlit a $900m grant program for the WE charity despite obvious conflicts of interest.
Trudeau’s mother, brother, and wife have all received speaking fees from WE. Bill Morneau’s daughter works for the organization.
Neither man recused themselves and the cabinet seems to have no problem with this.
The Conservatives have called for the matter to be taken to the RCMP and the ethics commissioner is already investigating.
But as with first the Aga Khan investigation and then the SNC investigation, the ethics violations around this government keep growing.
This week both Trudeau and Morneau apologized. Justin Trudeau is a child when it comes to apologies.
He thinks he can say sorry and move on. The media of course regarding the Aga Khan, SNC, Blackface, and experiencing events differently when it was alleged Trudeau groped a young woman 20 years ago are willing to accept his apology and turn the channel.
This of course makes for a severe problem when the government seemingly gets away with actions that in any other country would see leaders resign or be impeached.
This story continues to grow this week. The government was willing to pay upwards of $43m to have WE administer the Canada Student Service Grant.
It was originally ballparked by the government to be a payment of $19.5m, we’re now potentially looking at double the amount.
The public service as outlined by Bardish Chagger, the Youth Minister, suggested that the grant program be outsourced by a third party.
The line here of course being painted by Chagger was that the public service recommended this and that the public service also recommended WE be the ones to implement the grant program.
It was Employment and Social Development Assistant Deputy Minister Rachel Wernick who suggested WE. Rachel Wernick is supposedly the sister in law of former head of the public service, Michael Wernick.
Now this is an interesting connection and could pan out to be important later.
But what Minister Chagger has done is paint a huge distraction and diversion as a way to cover the Trudeau government.
It has also been said that there were other non-profit organizations that were better equipped as we talked about last week to implement the grant program.
Now this is part one of the government’s effort to distract and it may have worked but more revelations came out this week.
It was revealed that Justin Trudeau’s half brother Kyle Kemper was paid more than $12,000 in speaking fees to be a “champion speaker” at the Crypto Valley Blockchain Conference in Switzerland.
The contract was awarded by the public service at Global Affairs but everything is under the microscope now.
It was also revealed that Natural Resources Minister Seamus O’Regan and Trudeau’s Chief of Staff Katie Telford helped WE raise $400,000 before the Liberals came to power.
These two were of course involved in the $900m grant program and did not recuse themselves.
O’Regan says he was working at arms length because he was working with Artbound, another charitable organization that works with WE.
But this doesn’t change the fact that these are two senior officials in this government that are subject to the Conflict of Interest Act.
While this was originally thought to focus solely around the cabinet table and Trudeau’s inner circle, it goes even deeper than that.
Public Health Canada issued a non-competitive contract to the WE Charity in October 2019 for the sum of $24,990 for “professional services not otherwise specified”
This is the same Public Health Canada that has been in charge of pandemic response where Dr. Theresa Tam has been the front facing person.
And from a quick look on the Government of Canada website, WE has received at least 4 other contracts. All of which were traditional non-competitive.
These other four were valued at $13,374, $17,050, $24,996, and $40,000.
The contracts as listed are either for “other professional services not specified”, “management consulting” or “public relations services.”
This was a quick Google search that anyone in the media could’ve done and if anything this week we have more questions than answers.
Now we don’t know what three of these are, we already have detailed the public health contract for almost $25,000 but another one of the contracts, the one for $13,374 was to help WE charity secure Canadian talent at a WE Day event in… California.
The only Canadian who appeared at that event was Lilly Singh who was also on the government’s list of Election’s Canada influencers before the program was cancelled.
Then finally to top off the week, the Trudeau government announced a $19b program for provinces to safely restart their economies and have also expanded the Canadian Emergency Wage Subsidy program.
This is the Trudeau cycle: feign ignorance, deflect, ignore, and blame, apologize, then distract.
Deputy Prime Minister Chrystia Freeland was asked about the cabinet’s position on this. She said that she has full confidence in the Prime Minister and for all intents and purposes, it’s the cabinet's fault and they need to do better.
We have heard this before, with all of the other Trudeau scandals and missteps. In the election it was blackface and all Canadians had to be less racist.
This government thinks they’re off the hook and the media is going to let them have that. It may not be so simple.
With more and more details of contracts dripping out there will be a continued discussion on this, ethics investigations, and perhaps an RCMP investigation.
But unlike the Aga Khan or SNC-Lavalin this scandal is simple. It can be explained in one sentence: The Trudeau government in an effort led by Trudeau has given preferential treatment to a charity that the Trudeau family is close to and the family has reaped the benefits on the taxpayers dollar.
Plus, with this one being about money and everyone being tight on money today, this is something that hits home and is more tangible than any of the other scandals.
Supplementals:

Word of the Week

Dumping - when manufacturers export a product to another country at a price well below the normal price, in order to increase market share in a foreign market by driving out competition and thereby create a monopoly

How to Find Us
Westerncontext.ca

westerncontext.ca/subscribe

westerncontext.ca/support

twitter.com/westerncontext

facebook.com/westerncontext

Show Data

Episode Title: Revelations and Consequences

Teaser: Canada sells our security to a Chinese corporation, the CBC doesn’t do their homework on Alberta’s new energy regulator, and BC’s homeless hotels have resulted in severe consequences for businesses. Also, we detail more revelations on the WE Scandal.

Recorded Date: July 17, 2020

Release Date: July 19, 2020

Duration: 50:25

Edit Notes: Internet cut out at BC

Podcast Summary Notes

Duration: XX:XX