The Canadian government will provide C$40 million in funding to telecom network equipment maker Nokia for research on 5G wireless technology.
The funding to Finland-based Nokia will help understand how data is routed, how optical networks are managed and cyber security, a spokeswoman for the office of minister of Innovation, Science & Economic Development said in an email on Thursday.
The deal will be announced on Friday, Reuters reported.
Canada is currently studying the security implications of 5G networks, but unlike some allies has not announced that equipment from China's Huawei Technologies will be excluded.
In August, US president Donald Trump signed a bill that barred the US government from using Huawei equipment and is mulling an executive order that would also bar US companies from doing so.
In Britain, telecoms operator BT is removing Huawei equipment from the core of its existing 3G and 4G mobile operations and will not use the Chinese company for central parts of the next network.
In August, the Chinese vendor published the on its Twitter account that both Huawei and ZTE had been informed by the Australian Government they were banned from providing 5G technology to Australia.
Ottawa is also locked in a bilateral dispute with China after Canadian authorities arrested Meng Wanzhou, chief financial officer of Huawei, on a US extradition request.
(Reporting by Shanti S Nair in Bengaluru; Editing by Sriraj Kalluvila)