Canada is likely to postpone a decision on whether to allow China's Huawei Technologies Co Ltd to supply 5G network equipment until after the October federal election, given increasingly strained relations with Beijing, say three well-placed sources.
The sources, who requested anonymity given the sensitivity of the situation, said the Liberal government of Prime Minister Justin Trudeau was reluctant to move until the fate of two Canadians detained in China became clearer.
China picked up the pair last December and later charged them with spying. Beijing acted after Canadian police arrested Huawei's chief financial officer on a U.S. warrant, a move condemned by China.
Experts in Ottawa are reviewing the security implications of 5G networks, including Huawei's participation. The United States is concerned the use of Huawei equipment could undermine national security.
Two sources with direct knowledge of the situation said there was no chance of an announcement before the election. A third source stressed a final decision had not yet been made but added it was unlikely details would be released in time for the vote.
A postponement could irritate telecommunications companies such as BCE Inc and Telus Corp, which cannot proceed with their plans for 5G wireless networks until Ottawa comes to a decision.
The 5G issue is entangled in the broader trade and diplomatic dispute with China. Trudeau has condemned the arrests of the two men and several Canadian allies, including the United States, are calling for their release.
Whether Canada was willing to allow a Chinese company to dominate an important part of the telecommunications network for the next generation was an important issue, said the third source.
China has also stopped importing some Canadian commodities.
Public Safety Minister Ralph Goodale, in charge of the 5G review, said in late April he intended the results to be made public by the election.
"We will be taking appropriate decisions in due course," said Goodale spokesman Scott Bardsley. Bell, Telus and Huawei did not respond to requests for comment.