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Canada’s review of Huawei won’t be derailed by threats, Goodale says

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Public Safety Minister Ralph Goodale is brushing off recent threats from China’s envoy to Canada, who warned of « repercussions » if the federal government bans the Chinese firm Huawei Technologies from supplying equipment to Canadian 5G networks.

Goodale spoke to reporters Friday during the Liberal cabinet retreat in Sherbrooke, Que., a day after Ambassador Lu Shaye told the media at the Chinese Embassy in Ottawa that « there will be repercussions » if Canada bans Huawei from its 5G network. Lu did not say what those repercussions would be.

Prime Minister Justin Trudeau followed up on Goodale’s remarks during the closing press conference of the retreat, saying that China should keep its politics seperate from business.

« One of the things that is of concern in this situation is the apparent blending of Chinese commercial interests with Chinese political positioning and consequences, » Trudeau said. « This is something that I think should be of concern, not just to Canadians but to people around the world. »

Prime Minister Justin Trudeau spoke to reporters in Sherbrooke, Quebec on Friday 0:44

Ottawa is studying the security implications of allowing the Chinese company to help develop the next generation of mobile infrastructure in Canada, which promises to be 10 to 20 times faster than current wireless connections and is designed to serve medical devices, self-driving cars and other connected technology. Unlike some of its allies, however, Canada has not announced a ban on Huawei equipment.

Goodale said Friday that China also threatened Australia when it reviewed Huawei’s role in its telecommunications network.

« We understand that those sorts of comments will be made in the process, but we will make our judgment based on what’s right for Canada and not be deterred from making the right decision, » he told reporters.

Chinese ambassador, Lu Shaye, warns there may be « repercussions » if Canada bans Huawei from its 5G network

Ambassador Lu Shaye spoke reporters at the Chinese Embassy in Ottawa 0:51

Goodale wouldn’t say when Canada is expected to finish its 5G review.

« We will make the appropriate analysis and take the decision ultimately that we believe to be in Canada’s national interests, » he said. « We’ve made it abundantly clear that we will not compromise national security. »

Trudeau said Canada would continue to follow the rule of law and that China and the rest of the world would be better off if Beijing did the same.

« We are reliant in this globalized and largely peaceful world on agreed-to rules and principles that must be respected if we are all to prosper together. That is the point we are respectfully and firmly making to China, » Trudeau said. 

Other Five Eyes countries have banned Huawei

Huawei has long insisted it is not a state-controlled company and denies engaging in intelligence work for the Chinese government. However, Chinese law dictates that companies must « support, co-operate with and collaborate in national intelligence work. »

Most of Canada’s partners in the Five Eyes intelligence-sharing alliance have taken action against the telecommunications firm.

New Zealand and Australia have banned the use of Huawei products in their 5G network development, fearing Huawei could use its access to spy for the Chinese government.

On Wednesday, a bipartisan group of U.S. lawmakers introduced bills that would ban the sale of U.S. chips or other components to Huawei, ZTE Corp. or other Chinese firms that violate U.S. sanctions or export control laws.

The bills specifically cite ZTE and Huawei, both of which are viewed with suspicion in the United States because of fears that their switches and other gear could be used to spy on Americans. Huawei is the world’s biggest telecommunications equipment maker.

« Other countries have obviously made their views known, and their views are important to us. And we will weigh all of that very carefully and in the decision-making process, » said Goodale.

China’s Ambassador to Canada Lu Shaye is warning Ottawa against banning Huawei Technologies from participating in Canada’s 5G networks. (Justin Tang/Canadian Press)

The back-and-forth between the ambassador and minister is the latest development in a deepening bilateral dispute.

Relations between China and Canada were put on ice last month when Canadian authorities arrested Meng Wanzhou, chief financial officer of Huawei, in Vancouver on a U.S. extradition request.

China then detained two Canadian citizens: businessman Michael Spavor and Michael Kovrig, a Canadian diplomat on leave to work for a non-governmental organization based in China.

McCallum briefing parliamentary committee 

Lu maintains the arrests of Spavor and Kovrig were legal and just while the arrest of Meng was the opposite.

Earlier this week, a Chinese court sentenced Canadian Robert Schellenberg to death for his alleged role in the smuggling of 222 kilograms of methamphetamines. His lawyer said he plans to appeal.

In the wake of that ruling, Prime Minister Justin Trudeau accused Beijing of arbitrarily using the death penalty and called world leaders to solicit their support.

Foreign Affairs Minister Chrystia Freeland says she will continue to see support from Canada’s allies in its dispute with China despite warnings from the Chinese ambassador to Canada to not to do so. 1:12

Lu said the current impasse could be resolved through negotiations, but those negotiations would be threatened if Canada were to ban Huawei Technologies from participating in Canada’s new 5G network for security reasons.

Trudeau spoke today with United Nations Secretary-General António Guterres. The two « reaffirmed their commitment to supporting multilateralism and the rules-based international order, » according to a PMO readout of the call. 

« Trudeau and the secretary-general discussed the arbitrary detention of two Canadians in China, the application of the death penalty to a third Canadian in China, and the importance of safeguarding international norms, including diplomatic immunity, judicial independence and respect for the rule of law, » the readout said. 

‘Last arrow in our quiver’

The Conservatives have urged Trudeau to speak directly to Chinese Xi Jinping. Canada’s ambassador to Beijing, John McCallum, was in Ottawa Friday to brief a Parliament committee. He described a phone call to Xi as the « last arrow in our quiver. »

« I think it is more effective if other means are deployed before we get to that point, » he said.

The briefing was held behind closed doors. McCallum told reporters he expected to tell the committee some things that the families of Spavor and Kovrig might not want aired publicly.

John McCallum, Canada’s ambassador to China, talks to reporters after briefing members of the Foreign Affairs committee regarding China in Ottawa on Friday, Jan. 18, 2019 (Chris Rands/CBC)

Despite the diplomatic tensions, McCallum said he believes it’s safe for most Canadians to travel to China, but added anyone who has had a past run-in with Chinese authorities might want to stay away.

He said his security detail suggested he remove the Canadian flags on his diplomatic car, but he called it a « crazy idea. »

« I drive proudly with the Canadian flag, » he said.

Both countries have issued travel warnings.

On Monday night, Global Affairs changed its online travel advisory for China to advise Canadians to « exercise a high degree of caution due to the risk of arbitrary enforcement of local laws. »

A day later, China issued its own advisory and urged its citizens to « fully evaluate risks » and exercise caution when travelling to Canada, citing the « arbitrary detention » of Meng.

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‘Business as usual’ for Dorel Industries after terminating go-private deal

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MONTREAL — Dorel Industries Inc. says it will continue to pursue its business strategy going forward after terminating an agreement to go private after discussions with shareholders.

« Moving ahead. Business as usual, » a spokesman for the company said in an email on Monday.

A group led by Cerberus Capital Management had previously agreed to buy outstanding shares of Dorel for $16 apiece, except for shares owned by the family that controls the company’s multiple-voting shares.

But Dorel chief executive Martin Schwartz said the Montreal-based maker of car seats, strollers, bicycles and home furniture pulled the plug on a deal on the eve of Tuesday’s special meeting after reviewing votes from shareholders.

“Independent shareholders have clearly expressed their confidence in Dorel’s future and the greater potential for Dorel as a public entity, » he said in a news release.

Dorel’s board of directors, with Martin Schwartz, Alan Schwartz, Jeffrey Schwartz and Jeff Segel recused, unanimously approved the deal’s termination upon the recommendation of a special committee.

The transaction required approval by two-thirds of the votes cast, and more than 50 per cent of the votes cast by non-family shareholders.

Schwartz said enhancing shareholder value remains a top priority while it stays focused on growing its brands, which include Schwinn and Mongoose bikes, Safety 1st-brand car seats and DHP Furniture.

Dorel said the move to end the go-private deal was mutual, despite the funds’ increased purchase price offer earlier this year.

It said there is no break fee applicable in this case.

Montreal-based investment firm Letko, Brosseau & Associates Inc. and San Diego’s Brandes Investment Partners LP, which together control more than 19 per cent of Dorel’s outstanding class B subordinate shares voiced their opposition to the amended offer, which was increased from the initial Nov. 2 offer of $14.50 per share.

« We believe that several minority shareholders shared our opinion, » said Letko vice-president Stephane Lebrun, during a phone interview.

« We are confident of the long-term potential of the company and we have confidence in the managers in place.”

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Anglais

Pandemic funds helping Montreal businesses build for a better tomorrow

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Many entrepreneurs have had to tap into government loans during the pandemic, at first just to survive, but now some are using the money to better prepare their businesses for the post-COVID future.

One of those businesses is Del Friscos, a popular family restaurant in Dollard-des-Ormeaux that, like many Montreal-area restaurants, has had to adapt from a sit-down establishment to one that takes orders online for takeout or delivery.

“It was hard going from totally in-house seating,” said Del Friscos co-owner Terry Konstas. “We didn’t have an in-house delivery system, which we quickly added. There were so many of our employees that were laid off that wanted to work so we adapted to a delivery system and added platforms like Uber and DoorDash.”

Helping them through the transition were emergency grants and low-interest loans from the federal and provincial governments, some of which are directly administered by PME MTL, a non-profit business-development organization established to assist the island’s small and medium-sized businesses.

Konstas said he had never even heard of PME MTL until a customer told him about them and when he got in touch, he discovered there were many government programs available to help his business get through the downturn and build for the future. “They’ve been very helpful right from day one,” said Konstas.

“We used some of the funds to catch up on our suppliers and our rents, the part that wasn’t covered from the federal side, and we used some of it for our new virtual concepts,” he said, referring to a virtual kitchen model which the restaurant has since adopted.

The virtual kitchen lets them create completely different menu items from the casual American Italian dishes that Del Friscos is known for and market them under different restaurant brand names. Under the Prasinó Soup & Salad banner, they sell healthy Greek options and their Stallone’s Sub Shop brand offers hearty sandwiches, yet the food from both is created in the same Del Friscos kitchen.

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Downtown Montreal office, retail vacancies continue to rise

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Some of downtown Montreal’s key economic indicators are heading in the wrong direction.

Office and retail vacancies in the city’s central core continued to climb in the fourth quarter of 2020, according to a quarterly report released Thursday by the Urban Development Institute of Quebec and the Montréal Centre-Ville merchants association. The report, whose first edition was published in October, aims to paint a socio-economic picture of the downtown area.

The survey also found office space available for sublet had increased during the fourth quarter, which may foreshadow even more vacancies when leases expire. On the residential front, condo sales fell as new listings soared — a sign that the downtown area may be losing some of its appeal to homeowners.

“It’s impossible not to be preoccupied by the rapid increase in office vacancies,” Jean-Marc Fournier, the former Quebec politician who now heads the UDI, said Thursday in an interview.

Still, with COVID-19 vaccinations set to accelerate in the coming months, “the economic picture is bound to improve,” he said. “People will start returning downtown. It’s much too early to say the office market is going to disappear.”

Public health measures implemented since the start of the pandemic almost a year ago — such as caps on office capacity — have deprived downtown Montreal of more than 500,000 workers and students. A mere 4,163 university and CEGEP students attended in-person classes in the second quarter, the most recent period for which figures are available. Border closures and travel restrictions have also brought tourism to a standstill, hurting hotels and thousands of local businesses.

Seventy per cent of downtown workers carried out their professional activities at home more than three days a week during the fourth quarter, the report said, citing an online survey of 1,000 Montreal-area residents conducted last month.

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