OTTAWA — Years after Canada declared Huawei products unwelcome in its telecom networks, a spinoff of the company’s cellphone and tablet operation is laying groundwork to re-enter the Canadian market.

Honor Device Co. has been drawn to Canada by Prime Minister Mark Carney’s big speech at the World Economic Forum in Davos and his subsequent trade mission to China, said Mathew Palmer, a former General Motors executive helping Honor knock on doors in Ottawa.

“With the convergence of a lot of different things going on around the world, they said, ‘Maybe now is the time to look at Canada as one of our next markets,’” Palmer told The Logic. “Honor was at Davos and was impressed—it made an impact. So if you look at an innovation economy with stability, Canada starts to look pretty favourable.”

The company is interested in selling its handsets in Canada through the usual channels like telecom companies and mall kiosks, said Palmer, but is also sounding out potential for a deeper industrial commitment.

“When they go into different markets, they do also tend to look at things like research and development and other ancillary parts,” he said. He compared it to GM, whose Canadian assembly lines might get the most attention but whose Canadian engineering operation is nearly as hefty.

Honor started as a Huawei-owned discount brand, sometimes selling the same devices in different packaging. Huawei sold the division to a consortium of other Chinese owners in 2020 to protect it from United States sanctions targeting Huawei’s access to critical hardware components.

The company has diversified: Honor made the robot that recently ran a half-marathon faster than any human ever has (which is an achievement in robotics, if not in athletics).

Honor is majority controlled by the Shenzhen Assets Supervision and Administration Commission, a creature of the Shenzhen municipal government, which led the corporate rescue operation in 2020. Despite that state control, it’s quite different from Huawei, said Palmer: Honor isn’t “a strategic apparatus of the national government” in China.

Huawei makes a wide range of internet-connected products, from phones, smart watches and consumer routers to commercial-grade equipment for telecom companies. Canada spent years studying whether those posed a national security risk, on the theory that Beijing might spy on data passing through them—a prospect that Huawei vehemently rejected.

The federal government’s assessment was complicated by Canada’s 2018 arrest—at the U.S.’s behest—of Huawei executive Meng Wanzhou, who’s also the daughter of the company’s founder Ren Zhengfei. China promptly arrested Canadian diplomat Michael Kovrig and entrepreneur Michael Spavor.

Only after all three had been released did Canadian authorities say in 2022 that they’d concluded that having Huawei gear in the guts of Canadian telecom systems was a national security risk and that telecoms would have to get rid of it. Telcos started complying even though the Liberals, under then-prime minister Justin Trudeau, never quite passed the bill that would have given the policy statement its legal force.

Huawei consumer devices were never targeted in Canada; hundreds of them are approved for sale here, with new wireless earphones getting Innovation, Science and Economic Development Canada’s permission as recently as January. But you won’t find its phones next to ones from Apple, Samsung or Google in bundles from Bell, Rogers or Telus.

In the United Kingdom, which moved to expel commercial Huawei gear from telecom networks before Canada did, Honor phones are available through major providers like Vodafone and O2.

Newer Huawei phones don’t, by default, include access to Google services, like its app store, the way they used to; Google stopped licensing its software to Huawei to comply with U.S. government restrictions.

Honor has no such limitations, which Palmer pointed to as evidence of the company’s trustworthiness. Honor has “the ability to secure licences and build deep collaborations with tech leaders like Google, like Qualcomm, Microsoft,” he said. “These companies also have some of the most rigorous due-diligence processes in the world.”

For now, Palmer emphasized, Honor is only kicking Canada’s tires. His job is to set up meetings with government officials to see whether Honor can align with “Canada’s priorities in digital innovation.”

“What that leads to, in terms of timeline into entry, is yet to be seen,” he said. “But I can say that I’m working towards having those kinds of introductory meetings relatively soon.”