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Morning Brief

Wednesday, February 28, 2024 - By John Mazerolle

Here’s what you need to know to get the day started:

Canadian companies unwittingly used by Russian arms maker, leaked intelligence cache reveals 

 
A close-up of a green circuit board fills most of the frame.

An undated image provided to Reuters by the Centre for Defence Reforms Ukraine shows a circuit board recovered in Ukraine from a Russian Orlan 10 drone that has been found to contain microchips from U.S. manufacturers. (Centre for Defence Reforms Ukraine/Reuters)

 
At the outset of Russia’s invasion of Ukraine in 2022, countries including Canada immediately imposed extensive sanctions against the Russian military-industrial complex. But a recent hack of one Russian arms maker provides insights into how they pursue technology used to make weapons from unknowing Canadian companies, among others.

Activist hackers who call themselves the Cyber Resistance and are linked to secretive sections of the Ukrainian government, exfiltrated data from the email account of an employee at St. Petersburg-based arms company Special Technology Center (STC), a supplier of unmanned aerial vehicles and weapons to the Russian war effort in Ukraine. 

The cache, which was provided to CBC News, contains internal STC documents, company emails, contracts worth millions of rubles and target lists of electronics made in Canada, the U.S., U.K., China, Switzerland and Sweden, among others, that are needed to make their armaments. 

In a June 2023 email exchange, the hacked STC employee discusses with a colleague a target "list of manufacturers" and an attachment with a spreadsheet of specific electronic components the employee needed to acquire for what the Ukrainian military believes to be for the production of Orlan unmanned aerial vehicles, which are capable of cellular jamming enemy troops and gathering targeting and geolocation data for artillery barrages and missile strikes.

Named at the very top of that 2023 STC supplier list is EXFO, a Montreal-based tech company that has been noted by Prime Minister Justin Trudeau's office and says it has been a contractor for the U.S. Department of Defence. According to a company spokesperson, Russia is on a list of countries EXFO is banned from working with. But the spokesperson did say the tech firm can't control if its products end up in those countries. "EXFO also has no visibility to any potential alternate means of supply via other entities or countries."

Aimtec, a Montreal-based electrical parts manufacturer, also appears on a list of suppliers targeted by the drone maker. In a statement to CBC News, Aimtec said their products are not meant for military or aerospace applications and that they ensure all of their buyers comply with international export standards.

Russian companies circumventing international bans is a well established problem. How exactly STC ultimately obtains Western parts from unwitting companies like EXFO and Aimtec involves a murky supply chain that exploits the use of front companies and distributors in Russian-allied countries to shield the sale of what appears, on the surface, to be the peaceful purchase of tech products.

Global Affairs Canada spokesperson Jason Kung maintained that Ottawa had already imposed heavy sanctions against Russia since the full-scale invasion began in February 2022, noting that new bans were made on all microelectronics that qualify as "military and dual-use goods and technology." Kung pointed out that contravening Canadian sanctions is illegal, and both companies say they are fully compliant. There is nothing to suggest their parts have been knowingly provided for the production of STC products.
 

More on this issue

Read the full story here.

Ukraine's allies keep hitting Russia with more sanctions — and Russia keeps finding ways around them.

Financial intelligence agencies highlighting attempts to export sensitive technology to Russia.

Biden vs. Trump 2.0 is on its way — but both campaigns get warning signs in Michigan 

 
A woman smiles widely and holds a sign that says

(Kevin Dietsch/Getty Images)

 
A Democratic voter uncommitted to U.S. President Joe Biden rallies outside of a polling location as a car drives past in Dearborn, Mich., yesterday. A group of voters were calling on fellow Democrats to not support Biden in the Michigan Democratic primary because of his administration's support for Israel in its war against Hamas. The uncommitted vote earned about 13 per cent of the vote. Meanwhile, Republican frontrunner Donald Trump easily defeated Nikki Haley. However, Trump is consistently underperforming his polls so far, while Biden and Democrats have been outperforming theirs. Read a full analysis of the Michigan primaries by CBC's Alex Panetta here.
 
 
 

In brief

 
Three seniors in Ottawa say their monthly fees at Alavida Lifestyles retirement residence are increasing by hundreds, if not thousands of dollars, through what some experts describe as a concerning legal loophole in the province of Ontario. While the maximum allowable rental increase for 2024, set by Ontario's Landlord and Tenant Board, is 2.5 per cent, there is no cap on how much a seniors' home can increase fees for services, including meals. Eliane Bouchard, 91, said her monthly fees are going up from $2,452 to $3,405, forcing her to move. In an emailed statement from Alavida Lifestyles, chief financial officer Manny DiFilippo and CEO David Choo said "having permanent discounts in a very competitive marketplace would put significant financial strain on an operational business that requires the level of services required by care homes." Discounts were "implemented on a case-by-case basis as needed" and "were never intended and are not considered to be permanent in nature." But the tenants CBC News spoke to all said they were never told the discounts were temporary until recently and would not have moved into homes they would eventually be unable to afford had they been properly informed in the first place. Read more about the seniors here.

CBC News has spoken with former Shoppers Drug Mart pharmacy employees who believe the company is taking advantage of the MedsCheck service, an Ontario program that reimburses one-to-one consultations between pharmacists and eligible patients. Eight former employees say staff are pushed to bill for consultations patients don't necessarily need. The company can then bill the province up to $75 per call. In an internal letter obtained by CBC News that was emailed to company leadership last July, a group of pharmacy owners said the "borderline abusive" pressure to do more MedsCheck calls was affecting their ability to provide the best patient care. In an interview on Tuesday, Shoppers Drug Mart president Jeff Leger said the company does not "pressure pharmacists to bill for MedsChecks" in order to turn a profit. "We obviously monitor this very closely, take these allegations very seriously, but really believe that MedsChecks and Med reviews are actually having a positive impact on Canadians," said Leger. Read more about the accusations and MedsCheck here.

A comedy club in B.C. has cancelled a show after public outrage over a comedy troupe's sale of T-shirts depicting serial killer Robert Pickton. In a now-deleted Facebook post, Rick Bronson's House of Comedy B.C. in New Westminster wrote it had decided to cancel the Danger Cats event, saying it had missed the mark and aims to do better. The club wouldn't comment further on the cancellation, and CBC News could not reach the Danger Cats. The comedy trio, which hails from Alberta, includes Sam Walker, Brett Forte, and Uncle Hack. The trio wrote in a statement posted to social media yesterday that it is removing shows in multiple cities, including the New Westminster show, due to venue staff receiving death threats. The New Westminster Police Department said in a statement to CBC News it could not speak to whether any threats had been reported. Lorelei Williams, whose cousin Tanya Holyk was named as one of Pickton's victims, says seeing the T-shirt Danger Cats were selling made her nauseous and caused another family member to throw up. "This caused physical harm and pain," said Williams. "It's totally dehumanizing, it's so disgusting." Read more about the response to the T-shirt here.

Earn a fixed salary? You might be working for free tomorrow. Employers typically pay their salaried workers the same yearly amount, whether the calendar year has 365 or 366 days, unless the contract states otherwise. As a result, the average salaried worker is potentially losing out on hundreds of dollars on Feb. 29, while employers collectively save billions. "You still have your expenses for that day," Rohith Krishnan, a senior tax associate working in Toronto, pointed out. Meals, gas and transit fares still add up for many people on Feb. 29, Krishnan said. "I think we should be compensated." The average salaried worker earned the equivalent of $43.88 an hour, including overtime pay, according to the latest figures from Statistics Canada. So for a typical eight-hour day, someone would be losing out on $351, before taxes and other deductions. Read more about leap-year pay here.

Now here's some good news to start your Wednesday: Skeleton racer Hallie Clarke crashed at the finish line at the world championships in Germany — and it earned her a gold medal. "It hurt, but it was worth it. As soon as I saw the time, at that point I didn't know that I had won it but I knew that I had gotten a medal and instantly pain just went away," Clarke said. The 19-year-old Canadian is the youngest person ever to win gold at the event. Clarke, who was born in Brighton, Ont., explained that the track timing mechanism sits right at the end of the final corner, making it more clock-efficient to crash through the finish. "Letting that happen is actually faster than steering to try to stop it, and I was like, if there was a time to let this happen and just take whatever pain comes with it, it would be for a world championship title," she said. Immediately after her crash landing, Clarke made her way to the crowd and embraced her mom, who was decked out in a Canada tuque and jacket while holding the Maple Leaf flag. "It was my favourite moment of that whole week.... She was crying, and then I just instantly started crying. I couldn't help it," Clarke said. See Clarke's chaotic slide over the finish line here.

FIRST PERSON

As a new Canadian, it's my responsibility to help newcomers with the kindness I was shown

From navigating life at school to learning about winter sports and libraries, Dami Fakolujo reflects on what he's learned after moving to Canada 11 years ago and why he feels it's now his responsibility to help the next wave of newcomers to settle here. Read his First Person piece here.

 
 

Consumer news, tips and insider info to help you save cash and stay healthy. Click here to subscribe to the newsletter.

Front Burner, CBC News

The Liberals’ pitch to regulate online harms

The federal Liberals say their new online harms bill is about protecting children online. But does it address concerns of censorship, and will it really make us safer? Listen to today's episode

Today in history: Feb. 28

 
1953: Scientists James D. Watson and Francis H.C. Crick announce they have discovered the double-helix structure of DNA, the molecule that contains the human genes.

1984: Prime Minister Pierre Trudeau goes for a walk in an Ottawa blizzard and decides to resign.

2010: Sidney Crosby's golden goal gives Team Canada a 3-2 overtime win over arch-rival United States in the men's hockey gold medal game at the Vancouver Olympics.

2013: Benedict XVI becomes the first pope in 600 years to resign.
 

(With files from CBC News, The Canadian Press, The Associated Press and Reuters)

 
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