OTTAWA (Reuters) – Canadian police said on Monday that an employee of Hydro-Quebec, Canada’s largest electricity producer, who was involved in research on battery materials, has been charged with espionage for allegedly trying to steal trade secrets for China.
Sino-Canadian relations have been volatile in recent years, with both sides accusing each other of industrial espionage. Earlier this month, Canada ordered three Chinese companies to divest their investments in Canadian critical minerals, citing national security.
Police said in a statement that Yuxing Wang, 35, who worked for the state-owned company as a researcher on battery materials, will appear Tuesday in court in Longueuil, Quebec.
She added that he will face four charges, including obtaining trade secrets, unauthorized use of a computer, fraud to obtain trade secrets, and breach of trust by a public official.
“While working for Hydro-Quebec, Mr. Wang obtained trade secrets for the People’s Republic of China, at the expense of Canada’s economic interests,” the RCMP said.
Wang, who is from Candiac in the province of Quebec, allegedly committed the crimes at the electric utility from February 2018 to October 2022. Police said the RCMP’s Special National Security Unit launched the investigation in August.
Wang worked for a Hydro-Quebec research unit dedicated to developing battery materials that has collaborated with industry players including the US Army Research Laboratory.
The company said he started working there in 2016 and was fired this month.
“The damage was limited due to our internal detection mechanisms,” said Hydro-Quebec spokeswoman Caroline Des Rosiers, who declined to detail the information he allegedly tried to steal.
Wang’s lawyer could not immediately be located for comment.
An RCMP spokesperson said: “Wang allegedly used this position to conduct research for a Chinese university and other Chinese research centers. He has reportedly published scientific articles and filed patents in collaboration with this foreign representative, not with Hydro-Quebec.”
No organization is immune from such incidents, said Dominique Roy, senior director of corporate security at Hydro-Quebec.
“Therefore, we must remain constantly vigilant and transparent,” he said in a statement.
Police said Hydro-Quebec is fully cooperating in the investigation.
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Canada is seeking to increase its own production and processing of critical minerals so that it can produce electric vehicle batteries and battery materials domestically. China is the world’s dominant supplier of electric vehicle battery materials.
“The fact that this alleged espionage concerns the battery ecosystem reminds me of how much care we will need,” Industry Minister Francois-Philippe Champagne told reporters.
Tensions between Canada and China have escalated since the detention of Huawei Technologies CEO Meng Wanzhou in 2018 on bank fraud charges for allegedly misleading HSBC about Huawei Technologies Co Ltd’s business dealings in Iran, causing the bank to breach US sanctions.
Beijing later arrested two Canadians on espionage charges. All three were later released.
Canada’s announcement of a new Indo-Pacific strategy to challenge China on human rights issues has also affected diplomatic relations. Meanwhile, the countries are collaborating on climate change and other common goals.
News of the arrest came as Canadian Prime Minister Justin Trudeau attended a G20 meeting on the Indonesian island of Bali. Chinese President Xi Jinping will also attend.
There was no immediate comment from spokespeople for Trudeau and Public Safety Minister Marco Mendicino.
Asked about Wang’s arrest during a regular briefing on Tuesday, Chinese Foreign Ministry spokeswoman Mao Ning said she was not aware of the situation, adding that “the Canadian side should handle such cases according to law and not politicize them.”
Additional reporting by Doina Schiaco and Steve Shearer; additional reporting by Alison Lambert in Montreal, Martin Pollard and Eduardo Baptista in Beijing; Editing by Paul Simao, Bill Berkrot, and Raisa Kasolowski
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