The company's Chief Financial Officer Meng Wanzhou is facing extradition to the US
The Canadian Prime Minister Justin Trudeau has insisted the arrest of a senior executive of the Chinese telecom firm Huawei was not political.
Although full details of the case have not been made public, the arrest of the company’s Chief Financial Officer Meng Wanzhou in Vancouver is believed to be in relation to an extradition request from the US over alleged violations by Huawei of US sanctions on Iran.
China has demanded the executive's release.
Ms Meng is the daughter of Huawei founder Ren Zhengfei.
She was arrested on Saturday as the leaders of the US, Canada and China attended the G20 Summit in Buenos Aires, Argentina.
It is believed she was arrested as US President Donald Trump dined with Chinese President Xi Jinping at the summit.
The two leaders agreed a 90-day trade truce during the event – however the arrest is now likely to re-escalate tensions.
Huawei has confirmed that arrest – but said it was not aware that Ms Meng had done anything wrong.
Speaking to reporters today, Justin Trudeau suggested officials were aware of the possible arrest a few days before it happened.
In comments quoted by The Globe and Mail, he said: “The appropriate authorities took the decisions in this case.
"We were advised by them with a few days' notice that this was in the works but of course there was no engagement or involvement in the political level in this decision because we respect the independence of our judicial processes."
Speaking today, US national security adviser John Bolton said his country had been 'concerned' about Huawai along with other Chinese technology firms - but declined to comment on Ms Weng's arrest.
Meanwhile, the Chinese foreign ministry this morning demanded her release and called on Canadian authorities to reveal why she was arrested.
She is due to appear before a bail hearing on Friday.
In a statement, the Chinese Embassy in Ottawa said: "The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim.”
"The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms Meng Wanzhou."
Shares in Asia sank amid fears the arrest could escalate tensions between the US and China once again.
Hong Kong's Hang Seng index earlier lost 2.7% while the Nikkei 225 in Tokyo fell 2.5%.
The Shanghai Composite index in China dropped 1.7% as the country's government demanded her immediate release.