Canada’s Defence Minister Points to Nortel, Which Fell as China’s Huawei Rose, When Citing Foreign IP Theft Risks

McGuinty’s remarks on foreign IP theft and Nortel mark the first time a Canadian minister has publicly referenced the company’s troubles in that context.

Minister of National Defence David McGuinty speaks to the media in Mirabel, Que., on July 14, 2026. The Canadian Press/Christinne Muschi

Canada must stay “vigilant” about foreign powers trying to acquire Canadian technology and intellectual property in light of the Nortel case, Canada’s defence minister says.

Telecommunication company Nortel, one of Canada’s major technology success stories, filed for bankruptcy protection in 2009, around the same time that China’s state-backed Huawei began to rise globally. Nortel’s former senior security adviser has said that for years he witnessed IP theft at the company by Chinese hackers, but his warnings weren’t taken seriously.

Defence Minister David McGuinty’s Aug. 6 remarks on foreign IP theft and Nortel mark the first time a Canadian minister has publicly referenced the company’s troubles in that context.

“We’re going to have to be vigilant. We have experience with this issue of the loss of intellectual property over time, for example, of Nortel previously,” McGuinty said at a press conference in Calgary when asked about what protective measures Ottawa is taking to stop foreign competitors such as China from stealing Canadian technology.

“That’s a very, very big question. The government has seized with this responsibility nowhere more obviously than I think in the field of artificial intelligence where Canada is becoming a major player,” McGuinty said, adding that Canada has put in place improved safeguards since the Nortel intrusion.

“The safeguards that we’ve got in place now are significant. Our security and intelligence organizations have more than a watching brief on these kinds of activities,” he said.

McGuinty’s comments came as he announced more than $20 million to build Canada’s third secure defence research centre, where Canada’s defence community, businesses, and researchers can collaborate on finding military applications for quantum technology, including encryption, navigation, sensing, and computing.

McGuinty was also asked about two Chinese  research vessels passing through U.S. Arctic waters in July, and whether the Canadian military is monitoring Chinese presence in the region.

McGuinty said, “I'll go only so far in saying that we are aware of activities in Canadian waters, sovereign Canadian territory, and are are keeping more than a watching brief on those activities.”

Nortel Case

A former global telecommunications leader, Nortel’s once highly successful market position experienced a sharp downward slide in the late 2000s, eventually filing for bankruptcy in 2009.

As Chinese telecommunications company Huawei rose in prominence, it also recruited a number of former Nortel employees—including former Nortel engineer Wen Tong, who brought his team over to Huawei Canada and went on to head the company’s global research into 5G technologies.

Former chief of the Canadian Security Intelligence Service for Asia-Pacific Michel Juneau-Katsuya previously stated in a 2020 interview that Canadian intelligence officials had cautioned executives at Nortel at an unspecified previous time that Chinese hackers were “sucking your intellectual property out,” but said the company didn’t respond effectively to the warning.

Hacking of the company’s data allegedly took place from 2000 until roughly 2009. Nortel’s former senior cybersecurity adviser Brian Shields stated that he first became aware of the cyber intrusions in 2004 and eventually traced the attacks to China.

Shields said Huawei was the main party that benefited from the decline of Nortel.

“Where was the manufacturer that was reaping the benefits of this? Was it the companies in Russia or France that were suddenly doing real good? No,” Shields said.

Shields said he has no direct proof of Huawei having received any of the stolen sensitive data from Nortel, and Huawei has denied any involvement in the cyber intrusions or the demise of Nortel.