The government of Canada is in “advanced stages” of drafting a list of entities that pose a risk to national security, and top universities are prepared to avoid working with these entities despite what could be a loss of $100 million or more in annual research funding from foreign partners.

The list will include foreign-state-connected universities, research institutes and laboratories that are believed to be at “higher risk” of engaging in theft, unwanted knowledge transfers and interference in research, according to government documents reviewed by the Star.

In response to the Star’s request for confirmation, Innovation, Science and Economic Development Canada (ISED) revealed for the first time that the government was working on a policy that will clarify which institutions pose a risk to national security and where research collaborations with such entities are ineligible for federal grants.

The government will “publicly define key terms such as sensitive research areas, affiliations, and research-performing institutions connected to foreign actors of concern,” the Monday statement said.

“Together with the research community and Canada’s national security agencies, the Government of Canada will establish a common and comprehensive approach to confront threats and protect Canada’s discoveries and innovations,” it added.

Experts say the move is an “extremely significant step” to protect Canada’s world-class research in fields such as quantum computing and artificial intelligence, but raised concerns about a dip in funding for cutting-edge projects.

Several leading universities told the Star that in complying with government policies, they will also work to strike a balance in their approach to avoid “profiling” researchers from certain countries.

Of countries dealing with this issue, Canada appears to be the first to confirm it will release an entity list that will serve as a “blanket ban” for federal funding for research with those entities, says Jeffrey Stoff, a former U.S. government analyst on technology protection and founder of the Center for Research Security & Integrity, a non-profit that supports efforts to assess risks to research security posed by China.

While the U.S. has an ever-expanding entity list of businesses, research institutions, government organizations and legal entities that are subject to U.S. trade sanctions and export controls, this list does not restrict research partnerships.

“Politicians in the U.S. are starting to have these conversations, but Canada can rightfully say they’re leading the way,” Stoff said. “Other countries including Germany, Australia and European Union members have released guidances on research security, but they leave it to individual universities to figure out policies on their own.

“The problem is that individual universities lack the capacity to map out all institutions of concern and it doesn’t make sense to duplicate such efforts. It makes a lot of sense for the Canadian government to release such a list to the public,” Stoff told the Star.

In February, Canadian authorities tightened their policies on bankrolling research with foreign entities, announcing that Canada’s federal research granting councils would reject funding for projects with institutions that had ties to foreign governments posing a risk to national security.

Critics at the time said the new directives were too vague and researchers needed more guidance on what projects with specific international partners would be ineligible for funding.

Chad Gaffield, chief executive officer of the U15 Canada association of leading research universities, confirmed the group is expecting the government to release the list in the near future.

Gaffield also said U15 schools are prepared to avoid working with entities on the list altogether out of a “shared responsibility to do research in the Canadian public interest,” regardless of whether such projects would be eligible for federal grants.

Several sources with knowledge of the government effort estimate that the final list will contain more than 50 entities with connections to China, Russia, North Korea and Iran.

The sources requested anonymity as they were not authorized to share information with the media. The list is being compiled with input from multiple federal agencies, Canadian researchers and the Canadian Security Intelligence Service, sources said.

The ISED spokesperson confirmed the policy is being drafted in collaboration with multiple departments including national security agencies, but declined to provide details on list contents.

Canada’s top 15 research universities, including the University of Toronto, University of Waterloo, McGill University and the University of British Columbia, together conduct about $8.5 billion worth of research annually, hold more than 80 per cent of university research patents, and receive more than 80 per cent of private research contracts in Canada.

Charmaine Dean, vice-president of research at the University of Waterloo, said she understands from government contacts that the list will be released “this summer” and once it is available, Waterloo is prepared to cut ties with all listed entities.

“Once we have that list of institutions, it will be embedded in everything we do. Waterloo researchers are top of the line for technology research in anything that deals with autonomous vehicles, AI, cybersecurity … and these are all areas of interest to certain countries because they are prime areas of strategic growth,” Dean said.

“So we safeguard everything. Not just our grant applications portfolio.”

Dean had previously told the Star that the University of Waterloo was ending all its research partnerships with Chinese telecommunications giant Huawei out of security concerns. Other universities then followed with statements that they would not pursue future partnerships with Huawei, but Waterloo remains the only major university to publicly say that it is extricating itself from existing contracts with Huawei.

Huawei, which is subject to Chinese laws compelling companies to assist in national intelligence work, is among the entities expected to be on the government entities list, multiple sources say.

Margaret McCuaig-Johnston, senior fellow at the Institute for Science, Society and Policy at the University of Ottawa, called the expected release of the entity list another “extremely significant” step toward safeguarding Canadian research security.

McCuaig-Johnston is the former executive vice-president of the Natural Sciences & Engineering Research Council (NSERC), which is the largest federal funder of science and engineering research. She estimates that if Canada’s top universities stop partnering with 50 entities, this would mean the loss of at least $100 million in annual funding from existing foreign partners. That would be in addition to federal funding losses.

“Now it’s up to the government and private companies to step up and provide more funding,” she told the Star.

The likely loss of funding and connections with international experts are the two main reasons why some have raised concerns about recent moves to prioritize national security interests.

Tamer Özsu, a computer science professor at Waterloo and director of the Waterloo-Huawei Joint Innovation Lab, told the Star that while his lab will likely cease to exist, he still welcomes the government list to provide clarity to researchers.

“It may mark the end of doing things in the dark, with whispers, winks and insinuations. It brings clarity for the academics and moves the discussion to another level. But I hope that there is some declaration about how they compiled this list, so it does not seem random.”

However, Özsu is worried that high-tech researchers from China in particular will feel discriminated against, and warns that dominant narratives gloss over the significance of Chinese scientists’ contributions to world research.

“The narrative is: ‘Canadian researchers are creating intellectual property on the public dime and giving it away to Chinese through these collaborations (or worse yet, Chinese are stealing our IP).’ This assumes that knowledge generation is one-directional: we create, and they steal.

“It may have been the case perhaps 30 years ago, but it is not today —– at least not in the subject areas I am familiar with. Certainly, there are areas where Canadian research is leading, but there are other areas where our international partners (in this case universities and companies in China) are leading. And we benefit from the collaboration by getting access to their know-how,” he said.

Susan Shirk, a veteran political scientist and expert on Chinese and global relations at University of California San Diego, said Canada has an opportunity to strike a balanced approach to research security, and warned against veering toward the direction the U.S. government has taken, with its continued Trump-era bans on the issuance of visas to Chinese students from certain universities.

“My own view is that research collaborations are so valuable to everybody and attracting talent to our world-class universities is a great strength of the United States and Canada as well. Restricting too much can be counterproductive and damaging.

“We have to remember that much of this knowledge is going to move around no matter what. When it’s published, it’s not a secret and not classified … Under Trump, there had been an overreaction and stigmatization of Chinese scientists.”

According to a government document pertaining to the entity list seen by the Star, Canada’s approach to research security would reflect “an anti-racism lens” and “must promote inclusive environments; focus on specific threats with identifiable risk, not groups of people.”

The document made it clear that grant applications with a partner on the entity list will be ineligible for federal funding. The document and government spokespersons did not specify any consequences for universities that choose to collaborate with research partners for projects that aren’t being reviewed for federal grants.

The Star contacted all universities of the U15 group individually to ask how they would respond to the release of an entities list.

A spokesperson for the University of Toronto said the school could not comment on the list before it is released by the government.

In an interview, Marie-Josée Hébert, vice-rector of research at the Université de Montréal, said the university is already prepared to launch training and consultations with students and researchers as soon as the government list is released.

When asked whether the university will avoid working with entities on the list altogether, Hébert said: “We are confident that we will be fully compliant. We’ll be looking forward to seeing the list and obviously go from there, but we will probably lean on being on the safe side.

“We will move forward in a responsible manner to really balance research security but also make sure we don’t develop approaches that would be detrimental to some of our community of students, whether foreign or Canadian.

“Canadian partners in some cases have ties with foreign influence that aren’t clear. We need to make it second nature to assess, diagnose, mitigate and evaluate any remaining red flags … in a country agnostic fashion.”

Dennis Molinaro, a former national security analyst with the federal government and an instructor in legal studies at Ontario Tech University, told the Star that Canadian universities have been “highly attractive targets for years” for foreign states’ intellectual-property collection because of the research projects those institutions are involved in.

“Just look at the technology research they do and the talent they put out. The main ways (foreign entities) try to gain ownership of that research is through trying to entice researchers with grants and funding and offering support to commercialize research, in exchange for (intellectual property) transfers.”

Molinaro stressed that such activities were mostly done out in the open and enshrined in legal contracts, taking place before concerns about national security became more of a focus in Canadian political discourse.

For example, according to research partnership contracts between UBC and Huawei obtained by the Star through freedom-of-information request in 2020, UBC appeared to receive millions of dollars in research funding from Huawei, where some deals denied UBC intellectual property rights.

According to multiple contracts dated between 2014 and 2018, UBC granted Huawei “all right, title and interest to intellectual property,” retaining for itself only the right to use “foreground intellectual property solely for the purposes of teaching and other academic and non-commercial uses.”

In response to the Star’s questions about its partnerships with Huawei and potential response to a government entity list, a UBC spokesperson said: “UBC, like many other universities in Canada, is continuing to evaluate its position on the matter.”

UBC isn’t unusual for handing over intellectual property rights to foreign-linked partners. According to research from the Waterloo-based Centre for International Governance Innovation, more than half of industry-directed intellectual property that Canadian universities generate is assigned to foreign companies.

Huawei Canada has not responded to multiple requests from the Star for comment.

It is unclear how private companies and research institutions in Canada could react to the release of an entity list.

Last November, the RCMP made its first arrest in what it says is the increasingly active sphere of trade secrets stolen for the benefit of China.

Yuesheng Wang, a 35-year-old researcher with Hydro-Quebec, the province’s energy provider, was arrested following a three-month investigation and charged with alleged economic espionage.

Joanna Chiu is a B.C.-based staff reporter for the Star. She covers global and national affairs. Follow her on Twitter: @joannachiu

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