VANCOUVER, British Columbia — Sun Yian was living the Canadian dream.

The Chinese immigrant found fortune harnessing Canadian talent to develop cutting-edge technology, everything from semiconductors to facial recognition, to take back to China. His company grew to more than 1,500 employees across China and North America, and was lauded by Canadian officials as a model for unlocking the Chinese market to create homegrown prosperity.

Then Mr. Sun stopped paying his Canadian workers and fled to China. Left behind are lawsuits from angry investors and Canadian employees who are wondering whether their work could be used to help China’s growing domestic surveillance state.

Canada has long benefited from close business ties to China, and lawmakers have courted the country as a new market for Canadian companies as well as a source of investment. Now, Mr. Sun’s story is fueling calls for heightened skepticism of Chinese money.

“Canadian officials have to some degree been blinded by China’s incredible economic growth and waves of capital spreading worldwide,” said Michael Byers, a professor of global politics and international law at the University of British Columbia in Vancouver. “They’re certainly naïve to China’s approach to acquiring high tech from other countries, and they haven’t pushed hard on getting answers before allowing deals to go through.”