Canada's spy agencies are divided over whether or not to ban Chinese technology giant Huawei from fifth generation (5G) networks over security concerns, the Globe and Mail reported Wednesday.
The Canadian Security Intelligence Service (CSIS) and the Communications Security Establishment (CSE) were tasked with conducting a cybersecurity review to evaluate the risks as well as the economic costs to Canadian telecoms and consumers of blacklisting the equipment supplier.
The Americans and Australians - who are partners with Canada, Britain and New Zealand in the Five Eyes intelligence-sharing network - have warned that Huawei may be compelled under Chinese law to help Beijing spy or sabotage Western networks.
The Globe and Mail, citing an unnamed source, said the spy agency CSIS and the electronic eavesdropping agency CSE disagree on how to proceed.
The CSE reportedly supports an outright ban while the CSIS believes the risks can be mitigated with robust testing and monitoring of equipment.
Government officials did not immediately respond to a request for comment.
A decision is expected in the coming months, but could be delayed amid strained relations between Ottawa and Beijing over the arrest in Vancouver of a senior Huawei executive on a US warrant last December and the detention of two Canadians in apparent retaliation.
Huawei is already prohibited from bidding on government contracts and core network equipment such as routers and switches.
An outright ban could cost Canadian telecom firms millions of dollars in extra costs, they have said.
Two of Canada's three largest wireless carriers, Bell and Telus, would have to replace Huawei equipment in their existing networks. Both have also signalled plans to use Huawei gear in upcoming 5G rollouts.
Rogers, the nation's top carrier by number of subscribers, meanwhile, has said it planned to buy 5G equipment from Sweden's Ericsson.
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