October 17, 2012 / 4:10 PM / 7 years ago

Canada beefs up cyber security amid reports of Chinese hacking

* To spend C$155 mln more to combat hackers, cyber espionage

* U.S. warnings, recent hacking attempts play into decision

By Randall Palmer

OTTAWA, Oct 17 (Reuters) - Canada said on Wednesday it will beef up its defenses against Internet hackers as it grapples with reports of Chinese hacking of Canadian companies and a U.S. warning of the risks of Chinese cyber espionage.

The government will spend an additional C$155 million ($158 million) over five years on strengthening its response center for dealing with cyber threats in the private sector as well as boosting the security of the government’s own communications, Public Safety Minister Vic Toews said.

The announcement came less than a month after Toews’ department acknowledged a pair of cyber attacks on a Canadian energy company and on a manufacturer of software used by energy firms. The government declined to comment on reports that suggested a Chinese connection.

A U.S. congressional report last week warned of the risks of doing business with Chinese telecom equipment makers Huawei Technologies Co Ltd and ZTE Corp because of possible Chinese cyber espionage.

“Keeping our cyber networks and infrastructure secure and resilient is one of the most challenging issues facing our government, our citizens and our allies,” Toews told a news conference at a technical college in Ottawa.

“I can assure you that our government is fully engaged in meeting and overcoming this challenge.”

Declining to name China or any company, Toews said his announcement was partly in response to concerns that have been raised but also part of a broader strategy laid out two years ago to try to make Canada’s cyber infrastructure safe.

The focus on China has come at an awkward time for Chinese state-owned CNOOC Ltd, whose $15.1 billion bid to buy Canadian oil producer Nexen Inc needs Canadian government approval.

Toews said strengthening the provisions of Investment Canada Act, which governs foreign takeovers of Canada companies, may be a possibility.

“This is a constant struggle because of the nature of technology and how quickly technology is evolving, so we are certainly looking at all possibilities when we look to further buttress our secure mechanisms,” he said.

The new government funding is on top of a previous allocation of C$90 million over five years.

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