Canada Beefs Up Spending On Cyber Security

OTTAWA—Canada said it will more than double spending on defense against cyberattacks, amid heightened global worries over cyber warfare.

Vic Toews, Canada's public-safety minister, said his department would spend an additional 155 million Canadian dollars (US$158 million) over five years on cyber security, underscoring a recent call to arms among Western allies, from the U.S. to Britain, over the threat. The new Canadian commitment is on top of C$90 million already allocated for cyber security over the same period.

The move came a week after a scathing U.S. congressional report designated Huawei Technologies Inc., a Chinese technology-equipment firm that has made big inroads in Canada, as a potential national-security threat.

Earlier this year, U.S. intelligence officials voiced concern to Canadian officials in Washington about Canada's potential susceptibility to cyber espionage and attacks, according to a person familiar with the matter. Parts of northern U.S. states are supplied with utilities, such as water and electricity, from across the Canadian border, leading some U.S. officials to worry that an attack could affect these supply, the person said.

The new spending comes amid criticism among security experts that Canada spends too little on cyber defense compared to its Western allies. Even with the big increase, Canada is committing to spend much less than what some other Western governments are planning.

The U.K., for instance, said last year it will put an extra £650 million ($1.05 billion) into cyber-security over five years. In 2008, the U.S. began its Comprehensive National Cybersecurity Initiative, under which it plans to plow over $10 billion into cyber defense, and has since announced other cyber programs with multibillion-dollar budgets.

"Everyone is ramping up their budgets as fast as they can, but the U.S. and U.K. see more clearly that the cyber threat is an offensive," said David Skillicorn, an expert in cyber security at Queen's University in Kingston, Ontario.

Mr. Toews said the new money would be used to strengthen government computer networks, raise public awareness of cyber threats and boost the Canadian Cyber Incident Response Centre, which monitors threats and coordinates response.

A representative for the ministry wasn't immediately available to comment on criticism over Canada's approach.

Cyber-defense experts have said Chinese-based hackers have broken into the networks of Canadian companies in a bid to siphon off information and technology.

Last month, the CCIRC said it was aware of an attack against Telvent, the Canadian arm of French firm Schneider Electric SA, SU.FR +1.86% a company that designs software for the energy industry. The CCIRC didn't say where the attack had originated; some experts said it came from China.

A representative for the Chinese Embassy in Ottawa wasn't available to comment. A statement on the embassy's website says allegations of Chinese government support for hacking are "groundless."

Telvent acknowledged the breach, and a spokesman said Wednesday that the company is continuing to work with its customers to ensure it has been contained.

The Canadian announcement comes a week after a U.S. congressional report that designated Huawei a potential national-security threat. Huawei has called the report misleading and an exercise in China-bashing.

While the telecom-equipment company hasn't built a big business in the U.S., it has grown quickly in Canada, working with two of the country's biggest telecom providers. Days after the U.S. report, Ottawa signaled it might bar Huawei from bidding on a contract to build a new Canadian government email system. Mr. Toews declined to comment Wednesday on whether the Chinese firm would be excluded from that bidding.

Write to Alistair MacDonald at [email protected]

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